BIM75725 - Trading losses: restriction of relief: partnerships

Where in any year of assessment there has been a change in the membership of the partnership, for the purpose of ICTA88/S384 the trade, profession or vocation is treated as continuing so long as there was at least one person who was engaged in the trade both before and after the change.

It follows that if, during the year of assessment, there is a change in the manner in which the trade is carried on and the loss qualifies for relief under the provisions of ICTA88/S384 (3), (see BIM75715), a continuing partner is entitled to claim relief in respect of their share of the losses of the firm as previously constituted as well as of the new firm. This applies even when the change in the membership of the partnership occurs before the change in the manner of trading. But an outgoing partner is denied any relief for that year unless the change in the manner of trading took place before they ceased to be a partner.