Section 59 Restriction on relief for members of LLPs

United Kingdom

(1)

This section applies if—

(a)

a company carries on a trade (“the LLP trade”) as a member of an LLP at any time in an accounting period, and

(b)

the company makes a loss in the LLP trade in that period (“the loss-making period”).

(2)

There is a restriction on the amount of relief that may be given for the loss—

(a)

under section 37 F1or 45A (relief for trade losses against total profits) other than against profits of the LLP trade, F2...

(b)

under Part 5 (group relief)F3, or

(c)

under Part 5A (group relief for carried-forward losses)

(3)

The restriction is that the sum of—

(a)

the amount of the relief given, and

(b)

the total amount of all other relief within subsection (4),

must not exceed the company's contribution to the LLP as at the time mentioned in subsection (5).

(4)

Relief is within this subsection if it is given under section 37 F4or 45A or Part 5 F5or 5A for a loss made in the LLP trade by the company in an accounting period at any time during which it carries on that trade as a member of an LLP.

(5)

The time mentioned in subsection (3) is—

(a)

the end of the loss-making period, or

(b)

if the company ceases to carry on the LLP trade during that period, at the time when it does so.

(6)

If the LLP is carrying on, or has carried on, other trades apart from the LLP trade, for the purpose of determining the total amount of all other relief within subsection (4), apply that subsection in relation to each other trade as well as the LLP trade and then add the results together.

Annotations

Textual amendments

F1: Words in s. 59(2)(a) inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 153(2)(a)
F2: Word in s. 59(2)(a) omitted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by virtue of Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 153(2)(b)
F3: S. 59(2)(c) and word inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 153(2)(c)
F4: Words in s. 59(4) inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 153(3)(a)
F5: Words in s. 59(4) inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 153(3)(b)

Notes on Part 4

Modifications

C1: Pt. 4 modified (with effect in accordance with reg. 1(2) of the amending S.I.) by The Risk Transformation (Tax) Regulations 2017 (S.I. 2017/1271), regs. 1(1), 10
C2: Pt. 4 excluded (14.7.2022) by Energy (Oil and Gas) Profits Levy Act 2022 (c. 40), s. 1(5)(e) (with ss. 15(1), 16(1))