Finance Act 1968

20 Partnerships of companies and individuals

(1) Where one or more of the persons engaged throughout all or any part of a year of assessment in carrying on a trade to which section 73 of the [1965 c. 25.] Finance Act 1965 (company partnerships) applies is an individual, this section shall have effect as respects income tax which, in accordance with subsections (3) and (4) of that section, is chargeable for that year.

(2) Notwithstanding any difference between the partners' interests during the basis period and their interests during the year of assessment, the amount of the individual's income from the partnership for the year of assessment, or the total of the amounts of the individuals' incomes from the partnership for that year, shall be deemed to be not less than the profits of the basis period reduced, where any share was apportioned to a company under subsection (2) of the said section 73, by the amount of that company's share.

(3) Where there are two or more individuals, and, but for subsection (2) above, the total of the amounts of the individuals' incomes from the partnership for the year would fall short of the profits of the basis period reduced as aforesaid, that amount shall be apportioned—

(a) according to the individuals' interests during the year of assessment, disregarding any company's interest, and

(b) in so far as that does not determine or fully determine the apportionment, between the individuals in equal shares.

(4) In this section—

(a) " basis period ", in relation to a year of assessment, means any accounting period or part of an accounting period which is, or forms part of, the period on the profits or gains of which income tax for the year of assessment in question falls to be computed under Schedule D in respect of the trade, and

(b) references to an individual's income from the partnership are references to that income before deduction of capital allowances or charges on income.

(5) It is hereby declared that in the said section 73 " profits " does not include chargeable gains.

(6) This section shall be construed as one with the said section 73.