HMRC explained the approach to the application of these rules
to partnerships (including partnerships containing individual
members) in the article on FA97/Sch12 in the April 1997 issue of
Tax Bulletin:
We take the view that Schedule 12 should be applied to leasing partnerships at the partnership level (and not separately to each partner). The relevant 'period of account' is the partnership accounting period, as used for Sections 114/115 Income and Corporation Taxes Act 1988. The partnership profit relating to rental accruals, including any excess of the partnership rental earnings over the normal rent brought into account in the partnership computation, is then allocated to the partners in accordance with their partnership interests.`
