CTM36505 - Particular topics: companies in partnership: introduction

Companies may form partnerships with other legal persons and this includes individuals, other companies and trustees. For tax purposes, a ‘company partnership’ is a partnership in which at least one member is a company.

If all the members of the partnership are companies then the partnership cannot be required to make a partnership return under TMA70/S12AA for an accounting period which ends before 1 July 1999, the ‘appointed day’ for CTSA purposes. In these circumstances, you can only request them to do so. The SA penalty and enquiry procedures, etc only apply to such partnerships for accounting periods ending on or after 1 July 1999.

Each company member liable to UK CT is however required to include in its CTPF or CTSA return the share of profits it derives from the partnership.

In the context of the partnership return the term ‘CT partnership’ is used to describe a partnership all of whose members are within the charge to CT.

For guidance on:

• The nature and conduct of partnerships generally: see BIM72000 onwards.
• Computation of tax liability of company members (ICTA88/S114): see CTM36510 to CTM36540.
• Computation of tax liability of members who are individuals: see BIM72200 onwards.
• Limited partnerships: see CTM36550 and BIM72101.
• Limited liability partnerships: see CTM36550 and BIM72110.
• Restriction of the losses of limited partners and limited liability partners (ICTA88/S117 & S118): see CTM36550, BIM72105 and BIM72135.
• Investment partnerships: see CTM36560 and CTM36570.
• CG of partners (TCGA92/S59): see CG27000 onwards.
• Foreign partnerships with company members: see CTM02130.
• Arrangements for transferring relief between partners (ICTA88/S116): see CTM36590.

Note also that:

• The Partnership Act 1890 is reproduced at BIM72501 - BIM72505.
• The Limited Partnerships Act 1907 is reproduced at BIM72510 - BIM72515.