Corporation Tax Act 2010 section 60

Meaning of "contribution to the LLP"

Section 60 defines how to calculate the amount of a company's contribution to a limited liability partnership (LLP) for the purposes of the loss relief restriction in section 59.

• A company's contribution to an LLP is the sum of two components: Amount A (capital contributed, adjusted for withdrawals and entitlements to withdraw) and Amount B (the company's winding-up liability not already included in Amount A).
• Amount A includes capitalised undrawn profits (calculated under generally accepted accounting practice before tax adjustments) but is reduced by capital previously withdrawn, capital withdrawn within five years of the relevant time, capital the company is entitled to withdraw while a member, or capital it can require another person to reimburse.
• Withdrawals that have already been taxed as trading profits are not treated as reductions to Amount A, so these do not diminish the company's contribution figure.
• Amount B covers amounts the company is liable to contribute to the LLP's assets on a winding up, but only where that liability persists for at least five years from the relevant time (or until the LLP is actually wound up, if sooner).