Corporation Tax Act 2009 section 380

Partnerships involving companies

Section 380 sets out how loan relationship debits and credits are handled when a company is a partner in a firm that owes or is owed a money debt.

• When a firm carries on a trade or business and at least one partner is a company, special loan relationship rules apply to any money debt owed by or to the firm.
• Loan relationship credits and debits relating to the debt are excluded from the calculation of the firm's overall profits and losses for corporation tax purposes.
• Instead, each company partner must separately bring its own share of loan relationship credits and debits into account in its own corporation tax computation for each relevant accounting period.
• Further detailed rules on how company partners determine these credits and debits are contained in sections 381 to 385, covering areas such as fair value accounting, lending between partners and the partnership, exchange gains and losses, and deeply discounted securities.