Partnerships with corporate partners eligible for full expensing and super-deduction

Following discussions with HMRC, we are pleased to draw your attention to some changes to the Capital Allowances manuals that confirm that it is HMRC’s view that partnerships with corporate partners are able to claim capital allowances that are only available to companies within the charge to corporation tax, including first year allowances such as full expensing and the super-deduction – see changes to CA11145 and also the additional text added to the super-deduction guidance at CA23163. We also note that this point was clarified by the Financial Secretary to the Treasury, who said the following in the Finance Bill debate (Finance Bill - Hansard - UK Parliament – see columns 349 – 350, our emphasis): “The hon. Member for Ealing North also mentioned partnerships; a corporate partner is eligible for full expensing, but an unincorporated partner is not. Again, the annual investment allowance of £1 million covers the investment needs of almost all unincorporated partnerships.” Claims made via the partnership’s corporation tax computation will benefit the corporate partners of the partnership in proportion to their share of partnership profits, but partners who are subject to income tax will not obtain a benefit.