Partnerships ― overview

Copyright © 2026 LexisNexis
Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Partnerships ― overview

Copyright © 2026 LexisNexis
Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
imgtext

This guidance note summarises the tax treatment of partnerships, including how taxable profits or losses are calculated and allocated amongst partners with links to more detailed commentary. The guidance note also outlines the different types of partnerships and partners.

The legislation in relation to the treatment of partnerships is at ITTOIA 2005, ss 846–863L (Pt 9) for income tax purposes and CTA 2009, ss 1256–1273A (Pt 17) for corporation tax purposes, and HMRC guidance can be found from PM100000 onwards.

More detailed commentary can be found in Simon’s Taxes B7.101 and Ray: Partnership Taxation, Ch 1 onwards.

Tax treatment of partnerships

All UK partnerships are treated as transparent for tax purposes, including Scottish partnerships despite the fact that Scottish partnerships have a legal personality. This means that one ‘looks through’ the partnership to tax the partners directly. A limited liability partnership (or LLP, see below) is treated as tax transparent as long as it carries on a trade, profession or business with a view to a profit and so would not be tax transparent if, for example,

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+™
TAKE A FREE TRIAL NOW
Powered by Tolley+™
  • 13 Nov 2025 12:20

Home/ Tolley Tax Guidance/ Owner-Managed Businesses / Advising partnerships

Popular Articles

Owner-Managed Businesses

Repairs and renewals

Repairs and renewalsThe key consideration in determining whether expenditure on repairs and renewals is allowable as a deduction for tax purposes is whether it is capital or revenue in nature. In some cases, it can be relatively straightforward to identify revenue repairs. HMRC provides the

14 Jul 2020 13:23 | Produced by Tolley Read more Read more
Trusts and Inheritance Tax

Corrections and amendments to the IHT account

Corrections and amendments to the IHT accountThis guidance note explains how to deal with changes to the taxable values in the original inheritance tax account.Why do amendments arise?When the IHT account is first submitted to HMRC, it is based on information available at an early stage of the

14 Jul 2020 11:20 | Produced by Tolley Read more Read more
Employment Tax

Income tax paid on behalf of employee

Income tax paid on behalf of employeeIntroductionEmployers may wish to make payments of employment income to an employee / director without the employee suffering a tax or NIC cost on that pay. In other words, the employer wants to pay an amount net of tax and NIC. In some instances, often with

14 Jul 2020 11:58 | Produced by Tolley in association with Paul Tew Read more Read more