Income Tax Act 2007 section 937

Partnerships

Section 937 sets out the conditions under which payments made to partnerships qualify as excepted payments, meaning income tax does not need to be deducted at source.

• A partnership must be beneficially entitled to the income in respect of which the payment is made for it to qualify as an excepted payment.
• Every partner in the partnership must be an eligible person or body — either one listed in section 936, a UK resident company, a non-UK resident company trading through a UK permanent establishment that accounts for its full share of the payment in its chargeable profits, or the European Investment Fund.
• If even one partner does not meet the qualifying criteria, the payment cannot be treated as an excepted payment and income tax must be deducted at source in the normal way.
• The Treasury has the power to amend, by order, the categories of qualifying persons or bodies (other than those already covered by section 936).

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