Corporate taxpayers are entitled to certain accelerated capital allowances such as full-expensing and the super-deduction that are not available to individuals subject to income tax. In a partnership where all the members are subject to income tax, the process is simple: capital allowances are deducted from income and profit is distributed to members in accordance with the profit-sharing agreement.

In a corporate partnership, ie one where all of the members are subject to corporation tax, the capital allowances that are deducted from income include full-expensing and other investment incentives that are only available to companies.

Where a partnership has some corporate members and some members who pay income tax, the deduction of capital allowances is more complicated as profit is calculated for the partnership, but only the corporate members are entitled to enhanced capital allowances.

HMRC has updated its partnership manual to confirm that the corporate members of such partnerships should receive the same level of capital allowances as they would outside of the partnership. Guidance on how to achieve this has been added to the manual. It advises that such partnerships may need to submit more than one computation; one in respect of members who are subject to income tax and one for corporate members.