HMRC updates manuals to confirm relief
Recent updates to HMRC’s capital allowances manuals highlight changes concerning partnerships with corporate partners, reflecting HMRC’s view that such partnerships are now able to claim capital allowances typically reserved for companies within the charge to corporation tax. This includes first year allowances such as full expensing and the super-deduction.
For a partnership with some members within the charge to income tax and some within the charge to corporation tax, before the partnership profits are allocated to the members, it may be necessary for the partnership to submit more than one computation, for example one in respect of individual members who are subject to income tax and one in respect of company members who are subject to corporation tax.
As with the corporate partnership above, the computation for the ‘notional company’ can include a claim to capital allowances that are only available to companies within the charge to corporation tax. In this way, partnership members within the charge to corporation tax may obtain the benefit of first year allowances such as full expensing or the super-deduction (which partnership members within the charge to income tax are unable to access).
Updated guidance on capital allowances claims and partnerships can be found on CA11145 and the additional text added to the super-deduction guidance at CA23163.