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Corporation Tax (Northern Ireland) Act 2015

Chapter 16

96.Chapter 16 provides for the inclusion of the profit share of a corporate partner within the Northern Ireland regime where a partnership meets the definition of a Northern Ireland firm as set out at section 357WA. A Northern Ireland firm is a partnership which carries on a qualifying partnership trade as defined at section 357WB and meets either the SME partnership condition or the large partnership condition.

97.The definition of “qualifying partnership trade” means a trade carried on by a firm which is not an excluded trade. The definition includes where a firm makes a one-off election under section 357WB to bring in profits attributable to the back-office functions of certain trades which would otherwise be excluded.

98.The normal rules for determining the amount of a partner’s profit or loss apply but where the profits or losses of a firm’s trade are a combination of both Northern Ireland profits or Northern Ireland losses and mainstream profits or losses, the firm’s profit sharing arrangements are treated as applying separately in relation to each category.

99.If the rules under section 1263 of CTA 2009 require that the corporate partner’s share of profit of the trade is neither a profit nor a loss, the corporate partner is similarly treated as having no profit or loss for each category of profit or loss. If the corporate partner’s share of the profit of the trade is reduced, each category of profit or loss is reduced by the same proportion.

100.If the rules under section 1264 of CTA 2009 require that the corporate partner’s share of loss of the trade is neither a profit nor a loss, the corporate partner is similarly treated as having no profit or loss for each category of profit or loss. If the corporate partner’s share of the loss of the trade is reduced, each category of profit or loss is reduced by the same proportion.

101.Northern Ireland profits or losses or mainstream profits or losses may be increased or reduced by capital allowances or charges under CAA 2001.

102.Section 357WE modifies specified provisions of Chapters 6 and 7 in their application to Northern Ireland firms. Section 357WF modifies Chapter 8 (intangible fixed assets) in its application to Northern Ireland firms. Section 357WG modifies specified provisions in Chapter 15 (exploitation of patents etc) in their application to Northern Ireland firms.

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