Corporation Tax Act 2009 section 467

Connections where partnerships are involved

Section 467 explains how to determine whether a loan relationship is between connected companies when a partnership is involved as the creditor or debtor.

• When a partnership holds a money debt (as creditor or debtor), the connection test is applied to each individual partner rather than to the firm itself
• Each partner is treated as standing in the creditor or debtor position only to the extent of their appropriate share, based on the firm's profit-sharing arrangements for the accounting period
• This approach determines both whether a connection exists and how any amounts should be treated as a consequence of that connection (or lack of it)
• General partners of limited partnerships that are collective investment schemes are excluded from this treatment