Section 850A — Corporation Tax Act 2009: Profit-making period in which some partners have losses

Profit-making period in which some partners have losses 850A 1 For any period of account, if—

a the calculation under section 849 in relation to a partner (“A”) produces a profit, and b A's share determined under section 850 is a loss, A's share of the profit of the trade is neither a profit nor a loss.

2 For any period of account, if—

a the calculation under section 849 in relation to A produces a profit, b A's share determined under section 850 is a profit, and c the comparable amount for at least one other partner is a loss, A's share of the profit of the trade is the amount produced by the formula in subsection (3).

3 The formula is— FP × PP PP + TCP where— FP is the amount of the firm's profit calculated under section 849 in relation to A, PP is the amount determined under section 850 to be A's profit, and TCP is the total of the comparable amounts attributed to other partners under step 3 in subsection (4) that are profits.

4 The comparable amount for each partner other than A is determined as follows. Step 1 Take the firm's profit calculated under section 849 in relation to A. Step 2 Determine in accordance with the firm's profit-sharing arrangements during the relevant period of account the shares of that profit that are attributable to each of the other partners. Step 3 Each such share is the comparable amount for the partner to whom it is attributed.

5 In subsections (2) to (4) “ partner ” means any partner in the firm, whether or not chargeable to income tax.