This is a freeview 'At a glance' guide to Partnerships and the restriction in tax relief for intangibles.

Finance (No 2) Act 2015 includes changes to the legislation for the treatment of intangible fixed assets. It clarifies that assets acquired or disposed of by a partnership come within the existing rules for Goodwill and intangibles where there is a corporate partner.

The measure tackles arrangements that use partnerships or Limited Liability Partnerships (LLPs) to transfer assets in ways that seek to bring the assets within these rules without an effective change of economic ownership.

Where a company is a partner in a partnership, the partnership should calculate its profits along Corporation Tax lines before allocating a profit share to the company. Even though a partnership is not a company, the Intangible asset rules will apply to it if it has corporate partners.

The changes took immediate effect:

  • The legislation applies to debits and credits in accounting periods beginning on or after 25 November 2015.
  • For accounting periods straddling 25 November 2015 debits and credits are apportioned.

Useful guides on this topic

Goodwill and intangibles
How does the Corporation Tax intangible regime work? What is the treatment of goodwill for Corporation Tax? Do companies account for goodwill differently?

Intangibles regime and partnership interests
An interest in a partnership has special treatment under paragraph 76 of Schedule 29 to the 2002 Finance Act, under the section covering the Intangibles regime.

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