Corporation Tax Act 2009 section 1262

Allocation of firm's profits or losses between partners

Section 1262 explains how a partnership's trading profits or losses are divided among its partners for corporation tax purposes, based on the firm's profit-sharing arrangements.

• Each partner's share of the firm's trading profit or loss for an accounting period is determined by the firm's profit-sharing arrangements during that period
• Qualifying charitable donations made by the firm are allocated to partners using the same profit-sharing arrangements for the period in which the donations are made
• Adjustments apply where the normal allocation produces a loss for a partner when the firm overall makes a profit, or a profit for a partner when the firm overall makes a loss
• Profit-sharing arrangements means the partners' rights to share in trading profits and their obligations to bear trading losses