Part 9Partnerships
Firms with trading and other source income
856Overlap profits from partners' notional businesses
(1)
This section applies if—
(a)
the basis period for a partner’s notional business for a tax year is given by—
(i)
section 215 (change of accounting date in third tax year), or
(ii)
section 216(3) (change of accounting date in later tax year),
(b)
a deduction is to be made for overlap profit under section 220 in calculating the profits of the notional business of the tax year, and
(c)
the amount to be deducted exceeds the amount which would otherwise be the amount of the profits of the notional business of the tax year.
(2)
This section also applies if—
(a)
the basis period for a partner’s notional business for a tax year is given by section 202 (final tax year),
(b)
a deduction is to be made for overlap profit under section 205 in calculating the profits of the notional business of the tax year, and
(c)
the amount to be deducted exceeds the amount which would otherwise be the amount of the profits of the notional business of the tax year.
(3)
The amount of the excess is to be deducted in calculating the partner’s income for the tax year.