Corporation Tax Act 2009 section 1268

Election for spreading under Chapter 14 of Part 3

Section 1268 sets out special rules that apply when a firm in partnership makes an election to spread an adjustment charge arising from a change to mark-to-market accounting, particularly where there are changes in the partners carrying on the trade.

• A change in the persons carrying on a trade in partnership does not count as a permanent cessation of the trade, provided at least one company partner continues in the partnership both before and after the change.
• This prevents the adjustment charge from being accelerated or "rolled up" simply because a company leaves or joins the firm.
• Any election to spread the adjustment must be made jointly by all persons who were members of the firm during the 12 months ending immediately before the date the new accounting basis was adopted.
• The date on which the new basis was adopted is defined separately in section 1269 of the Act.