Allocate income to partners
The guide explains that LLP income is taxed in each partner’s hands rather than at LLP level, using that partner’s applicable rate. Partners may be individuals, companies or other legal persons. Their allocated capital allowances and trade losses are not unrestricted offsets against other income: relevant deductions are limited by contributed capital and cumulative earlier deductions. A loan to the LLP is different from contributed capital, and withdrawn capital can affect the calculation.
Track unabsorbed amounts and tests
The publication addresses carry-forward, qualifying transfers and carry-back of unabsorbed amounts, with different rules for donations. Current-year donations are not carried back. Capital allowances can require the same-business test and corporate partners can face shareholding conditions. Its annexes illustrate deduction order, transfers of property and section 10D investment-business cases. Keep partner-level capital, allocation and deduction schedules; the LLP’s accounting profit alone does not establish each partner’s tax result.
Official source
A concise, independent Apex Gateway guide based on the official English source, not a reproduction of the complete document. Consult the original for full conditions, exceptions and subsequent updates.
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