Finance Act 2014

Supplementary provision: deductions

4 (1) CTA 2009 is amended as follows.

(2) At the end of Chapter 5 of Part 3 (trade profits: rules allowing deductions) insert—

“Limited liability partnerships: salaried members

92A Deductions in relation to salaried members

(1) This section applies in relation to a limited liability partnership if section 1273A(2) (limited liability partnerships: salaried members) applies in the case of a member of the partnership (“M”).

(2) In calculating for an accounting period under section 1259 (calculation of firm’s profits and losses) the profits of a trade carried on by the limited liability partnership, a deduction is allowed for expenses paid by the partnership in respect of M’s employment under section 1273A(2) if no deduction would otherwise be allowed for the payment.

(3) This section is subject to—

(a) section 53 (capital expenditure),

(b) section 54 (expenses not wholly and exclusively for trade etc),

(c) section 1298 (business entertainment and gifts), and

(d) section 1302 (social security contributions).”

(3) In Chapter 3 of Part 4 (profits of property businesses: basic rules), in the table in section 210(2) (application of trading income rules), after the entry for section 92 insert—

“section 92A

deductions in relation to salaried members of limited liability partnerships”.

(4) In Chapter 2 of Part 16 (companies with investment business: management expenses)—

(a) in section 1224(1) (accounting period to which expenses are referable) for “1227” substitute “1227A”, and

(b) after section 1227 insert—

“1227A Management expenses in relation to salaried members of limited liability partnerships

(1) This section applies in relation to a company if—

(a) as a member of a limited liability partnership, the company is a company with investment business,

(b) section 1273A(2) (limited liability partnerships: salaried members) applies in the case of a member of the partnership (“M”), and

(c) expenses of management of the company’s investment business are paid in respect of M’s employment under section 1273A(2) but are not referable to any accounting period under sections 1225 to 1227.

(2) The expenses are to be treated as referable to the accounting period in which they are paid.”