‘a number of important substantive and procedural issues arising out of a series of closure notices issued by HMRC to Investec Asset Finance plc (‘IAF’) and Investec Bank plc (‘IBP’) in respect of their liability for corporation tax in the accounting periods between 1 April 2006 and 31 March 2010. The substantive issues concern the relationship between the statutory provisions concerning the taxation of profits made by partnerships and the taxation of a company’s business where that business includes owning interests in partnerships. Generally speaking, where a partnership is carried on by persons at least one of which is a company, it is not treated as a separate entity for tax purposes. According to sections 111 and 114 of the Income and Corporation Tax Act 1988 (‘ICTA’), the profits of the partnership are first calculated for the purposes of corporation tax as if the partnership were a company but then those profits are taxed in the hands of the corporate partners according to their proportionate interests in the partnership. Where those partners are companies rather than individuals, those companies are also liable for corporation tax on their own business profits under section 42 of the Finance Act 1998. ‘
Citations:
[2020] EWCA Civ 579
Links:
Statutes:
Income and Corporation Tax Act 1988
Jurisdiction:
England and Wales
Corporation Tax
Updated: 24 November 2022; Ref: scu.650530