Modifications etc. (not altering text)
C1Pt. 9 applied (1.4.2010) by Income Tax Act 2007 (c. 3), ss. 809BZH(2)(a), 809BZK(4)(a) (as inserted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 5 para. 3 (with Sch. 9 paras. 1-9, 22))
C2Pt. 9 modified (with effect as mentioned in Sch. 6 para. 6(2)-(7) to the amending Act) by Income and Corporation Taxes Act 1988 (c. 1) , s. 774D(4) as inserted by Finance Act 2006 (c. 25), s. 76, Sch. 6 para. 6(1)
(1)For each tax year in which a firm carries on a trade (the “actual trade”), each partner's share of the firm's trading profits or losses is treated, for the purposes of Chapter 15 of Part 2 (basis periods), as profits or losses of a trade carried on by the partner alone (the “notional trade”).
(2)A partner starts to carry on a notional trade at the later of—
(a)when becoming a partner in the firm, and
(b)when the firm starts to carry on the actual trade.
This is subject to subsection (3).
(3)If the partner carries on the actual trade alone before the firm starts to carry it on, the partner starts to carry on the notional trade when the partner starts to carry on the actual trade.
(4)A partner permanently ceases to carry on a notional trade at the earlier of—
(a)when the partner ceases to be a partner in the firm, and
(b)when the firm permanently ceases to carry on the actual trade.
This is subject to subsections (5) and (6).
(5)If the partner carries on the actual trade alone after the firm permanently ceases to carry it on, the partner permanently ceases to carry on the notional trade when the partner permanently ceases to carry on the actual trade.
[F1(6)If there is a change of residence, the partner is treated as permanently ceasing to carry on one notional trade when that change of residence occurs and starting to carry on another immediately afterwards.]
(7)Subsection (6) does not prevent a loss made before the change of residence from being [F2deducted under section 83 of ITA 2007 from] profits arising after the change.
[F3(8)Subsections (1A) and (1B) of section 17 apply for the purposes of subsection (6).]
Textual Amendments
F1S. 852(6) substituted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 79(2)
F2Words in s. 852(7) substituted (with effect as stated in s. 1034(1) of the amending Act) by Income Tax Act 2007 (c. 3), ss. 1027, 1034, Sch. 1 para. 579 (with transitional provisions and savings in Sch. 2)
F3S. 852(8) inserted (with effect in accordance with Sch. 45 para. 153(2) of the amending Act) by Finance Act 2013 (c. 29), Sch. 45 para. 79(3)