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
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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, it

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  • 13 Nov 2025 12:20

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