Income Tax Act 2007 section 103A

Meaning of "limited partner"

Section 103A defines who counts as a "limited partner" for the purposes of the sideways loss relief restrictions in Chapter 3 of Part 4 of the Income Tax Act 2007.

• A limited partner includes anyone registered as such under the Limited Partnerships Act 1907, anyone who in substance acts as a limited partner even if not formally registered, or anyone meeting equivalent conditions under the law of a territory outside the UK.
• A person is treated as acting in substance as a limited partner if they have no right to take part in managing the trade and are entitled to have their liabilities for trade debts met or reimbursed by someone else.
• For overseas arrangements, the individual must be carrying on the trade jointly with others and, under the foreign law, must have no entitlement to manage the trade and no liability beyond a certain limit for trade debts.
• Where an individual qualifies as a limited partner through the overseas route, references to the individual's "firm" mean the relationship between that individual and the other persons with whom they carry on the trade jointly.