Section 133M | Application of sections 133A and 133B in relation to corporate partner

(1)If a firm carries on a trade and any partner in the firm (“the corporate partner”) is within the charge to corporation tax, this section applies in determining the profits of the trade, in relation to the corporate partner, in accordance with section 1259(3) or (4).

(2)No deduction is allowed for expenses incurred by the firm if and so far as section 133A would prevent the expenses from being deductible if the firm were, and at all relevant times had been, a company.

(3)In its application for the purposes of subsection (2), section 133A is to be read subject to subsections (4) to (6).

(4)Section 133A(3)(b) is to be disregarded.

(5)Conduct of the firm is “relevant conduct” if the conduct occurs—

(a)on or after 29 April 1988, and

(b)at a time when—

(i)the corporate partner is for the purposes of section 133A a banking company, and

(ii)the firm would not (if references in section 133F(2) and (3) to companies included firms) be an excluded company for the purposes of section 133E.

(6)The disclosure condition in section 133C may be met by a relevant document relating to the liability of the corporate partner (as well as by a relevant document relating to the liability of the firm).

(7)Where in any accounting period of the firm (as defined by section 1261) the firm incurs expenses which but for section 133A (as read with subsections (2) to (6)) would be deductible in calculating the profits of the trade, the profits of the firm's trade are to be determined as if the references in section 133B to a company were a reference to the firm.