Corporation Tax Act 2009 section 80

Application of section 79 in cases involving partnerships

Section 80 clarifies how the rules on deducting additional employee payments (such as redundancy payments) apply when there is a change in the membership of a partnership carrying on a trade.

• This section applies where there is a change in the persons carrying on a trade and the trade is carried on by a partnership before or after the change, or both
• The employer is treated as having permanently ceased to carry on the trade unless a company that was a partner immediately before the change continues as a partner after the change
• A partial change in the companies carrying on a trade through a partnership does not count as a cessation of the trade for these purposes
• This means that redundancy payments are not automatically disallowed simply because some partners have changed, provided at least one company partner continues