Corporation Tax Act 2010 section 57

Meaning of "contribution to the firm"

Section 57 defines how to calculate a limited partner company's "contribution to the firm" for the purposes of the loss relief cap in section 56.

• The contribution to the firm is the sum of two amounts: Amount A (adjusted capital contributions) and Amount B (undrawn and uncapitalised profit shares).
• Amount A is the capital the company has put into the firm, reduced by any capital already withdrawn, available to be withdrawn, or reimbursable by another person — but withdrawals that were themselves taxed as trading profits are not treated as reductions.
• Amount B is the company's total share of profits from the limited partnership trade (and any other trades of the firm), excluding any profit share already added to the firm's capital or already received by the company in money or money's worth.
• Profits and losses for this calculation are determined using generally accepted accounting practice, before any tax-specific adjustments, and the company's share of losses is ignored when computing total profit share.