Section 140 — Corporation Tax Act 2009: Special rules for partnerships

Special rules for partnerships 140 1 This section applies for the purpose of calculating the profits of a trade carried on by a firm that is treated as making a deemed employment payment in connection with the trade.

2 The amount of the deduction allowed under section 139 is limited to the amount that reduces the profits of the firm of the period of account to nil.

3 The expenses of the firm in connection with the relevant engagements for any period of account are limited to the total of—

a 5% of the amount taken into account at Step 1 of the calculation in section 54(1) of ITEPA 2003 (calculation of deemed employment payment),

and b the amount deductible at Step 3 of that calculation.

4 In this section “ deemed employment payment ” and “ the relevant engagements ” have the same meaning as in Chapter 8 of Part 2 of ITEPA 2003 (see sections 49 and 50 of that Act).