Corporation Tax Act 2010 section 59

Restriction on relief for members of LLPs

Section 59 limits the amount of loss relief a corporate member of a limited liability partnership (LLP) can claim against profits other than those of the LLP trade, capping it at the company's contribution to the LLP.

• Where a company carries on a trade as a member of an LLP and makes a loss in that trade, there are restrictions on the relief it can claim against non-LLP profits, through group relief, or through group relief for carried-forward losses.
• The total of all such restricted reliefs — both the current claim and any previous claims of the same type — must not exceed the company's contribution to the LLP at the relevant time.
• The relevant time is either the end of the loss-making accounting period or, if the company ceases the LLP trade during that period, the date it stops trading.
• If the LLP carries on more than one trade, the restriction is applied across all of those trades and the results are aggregated to determine the overall cap.