BIM72235 - Partnerships: Computation & assessment: Individual, Company and Non Resident Members
Where one or more of the partners is a company the special rules
at ICTA88/S114 and ICTA88/S115 apply - see CTM36500 onwards - to
the corporate partners. In the case of a mixed partnership
consisting of members who are companies and individuals the share
of partnership profits allocated to corporate partners must be
computed using the corporation tax rules and the share of
partnership profits allocated to individuals must be computed using
the income tax rules. In such a case the partnership should submit
two sets of computations.
Similarly, where one or more of the partners is a
non-resident individual then the share of profits allocated to any
such partner must be computed using the special rules for
non-residents at ICTA88/S112. In any such case the partnership
should submit an additional set of computations.
Example
Mr Armstrong, a UK resident, and Mrs Beeton, a non-resident,
are in partnership. The partnership’s Case I world-wide
profit amounts to £10,000 and included in that sum is its UK
profit of £7,500. Partnership profits are shared equally. Two
tax computations are required on the following lines
Computation for resident partner
| Step 1 | Case I profit | £10,000 | |
| Step 2 | Allocation | Mr Armstrong | £5,000 |
| Mrs Beeton | £5,000 | ||
| Step 3 | Assess | Mr Armstrong | £5,000 |
Computation for non-resident partner
| Step 1 | Case I profit | £7,500 | |
| Step 2 | Allocation | Mr Armstrong | £3,750 |
| Mrs Beeton | £3,750 | ||
| Step 3 | Assess | Mrs Beeton | £3,750 |
