Corporation Tax Act 2009 section 1227A

Management expenses in relation to salaried members of limited liability partnerships

Section 1227A provides a rule for allocating management expenses to an accounting period where a company with investment business is a member of a limited liability partnership and pays management expenses in respect of a salaried member of that partnership.

• This section applies where a company is a member of a limited liability partnership and carries on investment business
• A member of the LLP must be treated as an employee of the company under the salaried member rules in section 1273A(2)
• Where management expenses are paid in respect of that salaried member's deemed employment but cannot be allocated to a specific accounting period under the normal rules in sections 1225 to 1227, this section provides a fallback allocation rule
• Such expenses are treated as belonging to the accounting period in which they are actually paid, ensuring the company can obtain a deduction for management expenses that would otherwise fall through the gaps