April 25, 2024


In January 2024, HMRC updated its guidance to confirm that a partnership which includes a corporate member is able to claim certain capital allowances in so far as the allowances relate to the corporate member’s profit share. These include the super deduction (“SD”) and full expensing (“FE”), but do not include the annual investment allowance (“AIA”), which remains unavailable to mixed partnerships; it was previously understood that mixed partnerships could not access either the SD or FE, in the same way they could not access the AIA.

It has been common practice for farming partnerships to have a corporate member which means this clarification could be beneficial for many farming businesses.

Under the new guidance, HMRC states that where a partnership has some members within the charge to income tax and some within the charge to corporation tax, the FE and SD allowances can be claimed, but it will be necessary for the partnership to submit more than one computation, being one in respect of the individual members subject to income tax, and the other in respect of company members subject to corporation tax.

It should be noted that while the SD is referenced in the guidance, this allowance came to an end for any qualifying purchases made after 31 March 2023 and, therefore, it is likely this will only be beneficial if amended returns for last year are submitted, although strict amendment time limits apply.

What this means practice

Two computations will now be needed going forwards, if businesses are to benefit from this relief, but the mismatch in rules between companies and individuals does give rise to complexities which have not yet been addressed by HMRC, and the savings may not be as great.

We will provide a further update once more information has been released.

Therefore, it could be an area of guidance that is quickly backtracked like we have seen with double cab pickups in February, and the closure of the helplines over the summer.


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