ITA07/S399 sets out two conditions for relief:
Condition A is that the individual must have been a member
of the partnership throughout the period from the use of the loan
until the date the interest is paid. However, Condition A is not
met if the individual is a member of a partnership as:
Condition B is that in the period applicable for condition A, the claimant must not have recovered any capital from the partnership, unless the capital has been used to reduce his borrowing (see SAIM10310).
An investment LLP is a limited liability partnership whose business is wholly or mainly making investments and which derives most of its income from investments. Whether a company is an investment LLP is to be decided for each period of account of the partnership. BIM72110 has more on LLPs.
Sleeping partners may claim relief provided all other conditions
for relief are met.
ITA07/S399 (5) allows senior employees (salaried partners)
of professional partnerships to count as partners for the purposes
of this section. The employees must act independently in dealing
with clients and be generally indistinguishable from the
firm’s partners. (This provision was formerly set out in
Statement of Practice A33).
Relief cannot be given if the individual has ceased to be a
member of the partnership, even if that former partner is unable to
withdraw capital immediately upon leaving the partnership.
