Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Profits definition

What does Profits mean? Profits describes the net surplus generated by a business or asset after deducting relevant costs, used to assess performance, tax liabilities, distributions and damages. The precise meaning is context‑specific. For corporation tax in the UK and Ireland, legislation provides that a company’s profits include both income and chargeable gains (capital gains), not just trading results. Key distinctions include: - Accounting profit: measured under applicable GAAP. - Taxable profits: accounting profit adjusted by statute (for example, disallowables, capital allowances, losses and group relief). - Distributable profits: profits available for lawful dividends under companies legislation (UK Companies Act 2006, Irish Companies Act 2014), broadly the company’s...

UK partnership loss computation, allocation and reliefs: income and corporation tax rules for general partnerships, LPs and LLPs; restrictions for limited and non-active partners; mixed member anti-avoidance

Published by a LexisNexis Tax expert

Practice notes

This Practice Note describes:

This Practice Note explains how trading losses arise and are applied for general partnerships, limited partnerships and limited liability partnerships (LLPs). For a general guide to capital losses, see Practice Note: Capital losses for businesses. Where a partner is allocated a share of a partnership trading loss, relief follows the income tax rules for individuals or the corporation tax rules for corporate partners.

the computation of partnership losses and how losses are apportioned between partners
special allocation rules where some partners have profits and others losses and/or in mixed membership partnerships
income tax loss relief available to individual partners
corporation tax loss relief available to corporate partners
restrictions on income tax relief for individual partners
restrictions on corporation tax relief for corporate partners
limits on relief for limited partners, LLP members and non-active partners

It does not cover the bespoke rules for partnership losses from an oil ring-fence trade or from trades exploiting films...

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Web page updated on 21/05/2026

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