The Office dealing with the general partner, should normally
also deal with the investment partnership. That Office should issue
the partnership with a partnership return. If all the members of
the partnership are companies then the partnership cannot be
required to make a partnership return for an accounting period that
ends before 1 July 1999, the ‘appointed day’ for CT SA
purposes. You can request such a partnership to make a return if
their accounting period ends before that date but you cannot
require them to do so.
If you decide to open an enquiry into the partnership return
the examination of the return should be made with a view to
confirming the partnership’s taxable profit or allowable loss
for each relevant class of income and the allocation of those
amounts among the partners in accordance with the partnership
agreement. In making those calculations the rules set out at
CTM36510 to CTM36540 are to be followed.
Any claim by a partner for a deduction of any kind from their
share of the gross income of the partnership should be examined
under the normal rules for that type of receipt. The deduction most
commonly claimed will be management expenses. When the BVCA
guidelines (see
CTM36580) were issued it was considered
that only the general partner would be entitled to these. But you
may now accept that limited partners are entitled to relief for
their share of the partnership’s management expenses provided
that the limited partner carries on an investment business within
ICTA88/S130.
