Corporation Tax Act 2010

56 Restriction on reliefs for limited partners

(1) This section applies if—

(a) at any time in an accounting period a company carries on a trade (“the limited partnership trade”) as a limited partner in a firm, and

(b) the company makes a loss in the limited partnership trade in that period (“the loss-making period”).

(2) There is a restriction on the amount of relief that may be given for the loss—

(a) under section 37 (relief for trade losses against total profits) other than against profits of the limited partnership trade, or

(b) under Part 5 (group relief).

(3) The restriction is that the sum of—

(a) the amount of the relief given, and

(b) the total amount of all other relief within subsection (4),

must not exceed the company’s contribution to the firm as at the time mentioned in subsection (5).

(4) Relief is within this subsection if it is given under section 37 or Part 5 for a loss made in the limited partnership trade by the company in an accounting period at any time during which it carries on that trade as a limited partner.

(5) The time referred to in subsection (3) is—

(a) the end of the loss-making period, or

(b) if the company ceases to carry on the limited partnership trade during that period, the time when it does so.

(6) If the firm is carrying on, or has carried on, other trades apart from the limited partnership trade, for the purpose of determining the total amount of all other relief within subsection (4), apply that subsection in relation to each other trade as well as the limited partnership trade and then add the results together.