CFM36020 - Loan relationships: partnerships: credits and debits calculated separately for each partner

Applying the loan relationships rules

CTA09/PT5/CH9 applies where the following conditions, in S380, are satisfied.

  • A trade, profession or business is carried on by persons in partnership (‘the firmâ€�),
  • any of those persons is a company (a ‘company partnerâ€�), and
  • a money debt is owed by or to the firm.

‘Money debt� is defined at CTA09/S301 - see CFM31020.

Computing the profits

When computing the partnership profits in accordance with CTA09/PT17, S380 excludes any debits or credits from

  • the money debt, or
  • any loan relationship that would be treated as arising from that money debt (such as interest on trade debts).

»Ê¹ÚÌåÓýapp debits and credits are instead computed separately for each company partner, by

  • calculating the gross debits and credits (CFM36030), then
  • apportioning them between each partner (CFM36040).