§ 36C — Limited partnership

36C.—(1) For the purposes of this Act, except as otherwise provided —(a)

references to a partnership include references to a limited partnership; and

(b)

references to partners of a partnership include references to partners of a limited partnership.

(2) In ascertaining the income of a limited partnership for the purpose of section 36(1)(a), section 10D applies to income from any business of the making of investments as if the limited partnership were a company.

(3) For any year of assessment, the amount of relevant deductions that may be allowed to or transferred by a limited partner of a limited partnership must not exceed —(a)

in the case of a relevant deduction allowed to the limited partner under section 35(2), an amount equal to the amount ascertained in accordance with the formula

(b)

in the case of a relevant deduction allowed to the limited partner under section 37(3)(a), an amount equal to the amount ascertained in accordance with the formula

(c)

in the case of a transferred deduction transferred by the limited partner, an amount equal to the amount ascertained in accordance with the formula

(d)

in the case of a carry‑back deduction allowed to or transferred by the limited partner, an amount equal to the amount ascertained in accordance with the formula

where A

is the limited partner’s contributed capital in that year of assessment;

B

is the past relevant deductions already allowed to the limited partner;

C

is the relevant deduction allowed to the limited partner in that year of assessment under section 35(2);

D

is the relevant deduction allowed to the limited partner in that year of assessment under section 37(3)(a); and

E

is the transferred deduction transferred by the limited partner in that year of assessment.

(4) If, as a result of any reduction in the contributed capital of a limited partner of a limited partnership in any year of assessment, the past relevant deductions already allowed to the limited partner exceeds the limited partner’s contributed capital, the excess is deemed to be income of the limited partner chargeable with tax under section 10(1)(g) for that year of assessment, and an amount equal to the excess is deemed to be a loss incurred by the limited partner in the trade, business, profession or vocation of the limited partnership.

(5) Subsections (3) and (4) do not apply in the year of assessment relating to the basis period in which the limited partner ceases to be a limited partner of a limited partnership or in any subsequent year of assessment.

(6) The precedent partner of a limited partnership must make and deliver, together with a return of the income of the limited partnership under section 71 or when required by the Comptroller by written notice, a return of the contributed capital of each partner of the limited partnership for any year of assessment.

(7) For the purposes of this section, the Minister may make regulations to give full effect to or to carry out the purposes of this section.

(8) In this section —“carry‑back deductions”, in relation to a limited partner of a limited partnership in any year of assessment, means —(a)

any deduction allowed to the limited partner of any allowance arising from any trade, business or profession, or any loss incurred in any trade, business, profession or vocation carried on by the limited partner in the limited partnership that is made against the limited partner’s assessable income from any other source for the immediate preceding year of assessment under section 37D(1) or any of the 3 immediate preceding years of assessment under section 37D(1A); or

(b)

any allowance arising from any trade, business or profession, or any loss incurred in any trade, business, profession or vocation carried on by the limited partner in the limited partnership that is transferred by the limited partner to a spouse under section 37E;

“contributed capital”, in relation to a limited partner of a limited partnership in any year of assessment, means the aggregate of —(a)

the amount, as at the end of the basis period for the year of assessment to be determined by the Comptroller, which the limited partner has contributed (in cash or in kind but not including any loan by the limited partner to the limited partnership) to the limited partnership as capital, and has not, directly or indirectly, drawn out or received back (whether as a distribution or a loan from the limited partnership or otherwise); and

(b)

the amount, as at the end of the basis period for the year of assessment to be determined by the Comptroller, of any profits or gains of the trade, business, profession or vocation from any past year of assessment to which the limited partner is entitled as a limited partner of the limited partnership but which the limited partner has not, directly or indirectly, received (whether as a distribution or a loan from the limited partnership or otherwise);

“limited partner” has the meaning given by the Limited Partnerships Act 2008;

“past relevant deductions”, in relation to a limited partner of a limited partnership in any year of assessment, means the aggregate of any relevant deductions allowed to the partner less any amount deemed under subsection (4) to be income chargeable with tax in any year of assessment before that year of assessment;

“precedent partner” has the meaning given by section 71;

“relevant deductions”, in relation to a limited partner of a limited partnership, means —(a)

any deduction allowed to the limited partner under section 35(2) of any allowance arising from any trade, business or profession carried on by the limited partner in the limited partnership;

(b)

any deduction allowed to the limited partner under section 37(3)(a) of any loss incurred in any trade, business, profession or vocation carried on by the limited partner in the limited partnership that is made against the limited partner’s statutory income from any other source;

(c)

any transferred deduction transferred by the partner; or

(d)

any carry‑back deduction allowed to or transferred by the partner,

as the case may be;

“transferred deduction”, in relation to a limited partner of a limited partnership, means any allowance arising from any trade, business or profession, or any loss incurred in any trade, business, profession or vocation carried on by the limited partner in the limited partnership that is transferred by the limited partner to a claimant company under section 37B or to a spouse under section 37C.[39/2017; 41/2020]

—(1) For the purposes of this Act, except as otherwise provided —(a)

references to a partnership include references to a limited partnership; and

(b)

references to partners of a partnership include references to partners of a limited partnership.

(2) In ascertaining the income of a limited partnership for the purpose of section 36(1)(a), section 10D applies to income from any business of the making of investments as if the limited partnership were a company.

(3) For any year of assessment, the amount of relevant deductions that may be allowed to or transferred by a limited partner of a limited partnership must not exceed —(a)

in the case of a relevant deduction allowed to the limited partner under section 35(2), an amount equal to the amount ascertained in accordance with the formula

(b)

in the case of a relevant deduction allowed to the limited partner under section 37(3)(a), an amount equal to the amount ascertained in accordance with the formula

(c)

in the case of a transferred deduction transferred by the limited partner, an amount equal to the amount ascertained in accordance with the formula

(d)

in the case of a carry‑back deduction allowed to or transferred by the limited partner, an amount equal to the amount ascertained in accordance with the formula

where A

is the limited partner’s contributed capital in that year of assessment;

B

is the past relevant deductions already allowed to the limited partner;

C

is the relevant deduction allowed to the limited partner in that year of assessment under section 35(2);

D

is the relevant deduction allowed to the limited partner in that year of assessment under section 37(3)(a); and

E

is the transferred deduction transferred by the limited partner in that year of assessment.

(4) If, as a result of any reduction in the contributed capital of a limited partner of a limited partnership in any year of assessment, the past relevant deductions already allowed to the limited partner exceeds the limited partner’s contributed capital, the excess is deemed to be income of the limited partner chargeable with tax under section 10(1)(g) for that year of assessment, and an amount equal to the excess is deemed to be a loss incurred by the limited partner in the trade, business, profession or vocation of the limited partnership.

(5) Subsections (3) and (4) do not apply in the year of assessment relating to the basis period in which the limited partner ceases to be a limited partner of a limited partnership or in any subsequent year of assessment.

(6) The precedent partner of a limited partnership must make and deliver, together with a return of the income of the limited partnership under section 71 or when required by the Comptroller by written notice, a return of the contributed capital of each partner of the limited partnership for any year of assessment.

(7) For the purposes of this section, the Minister may make regulations to give full effect to or to carry out the purposes of this section.

(8) In this section —“carry‑back deductions”, in relation to a limited partner of a limited partnership in any year of assessment, means —(a)

any deduction allowed to the limited partner of any allowance arising from any trade, business or profession, or any loss incurred in any trade, business, profession or vocation carried on by the limited partner in the limited partnership that is made against the limited partner’s assessable income from any other source for the immediate preceding year of assessment under section 37D(1) or any of the 3 immediate preceding years of assessment under section 37D(1A); or

(b)

any allowance arising from any trade, business or profession, or any loss incurred in any trade, business, profession or vocation carried on by the limited partner in the limited partnership that is transferred by the limited partner to a spouse under section 37E;

“contributed capital”, in relation to a limited partner of a limited partnership in any year of assessment, means the aggregate of —(a)

the amount, as at the end of the basis period for the year of assessment to be determined by the Comptroller, which the limited partner has contributed (in cash or in kind but not including any loan by the limited partner to the limited partnership) to the limited partnership as capital, and has not, directly or indirectly, drawn out or received back (whether as a distribution or a loan from the limited partnership or otherwise); and

(b)

the amount, as at the end of the basis period for the year of assessment to be determined by the Comptroller, of any profits or gains of the trade, business, profession or vocation from any past year of assessment to which the limited partner is entitled as a limited partner of the limited partnership but which the limited partner has not, directly or indirectly, received (whether as a distribution or a loan from the limited partnership or otherwise);

“limited partner” has the meaning given by the Limited Partnerships Act 2008;

“past relevant deductions”, in relation to a limited partner of a limited partnership in any year of assessment, means the aggregate of any relevant deductions allowed to the partner less any amount deemed under subsection (4) to be income chargeable with tax in any year of assessment before that year of assessment;

“precedent partner” has the meaning given by section 71;

“relevant deductions”, in relation to a limited partner of a limited partnership, means —(a)

any deduction allowed to the limited partner under section 35(2) of any allowance arising from any trade, business or profession carried on by the limited partner in the limited partnership;

(b)

any deduction allowed to the limited partner under section 37(3)(a) of any loss incurred in any trade, business, profession or vocation carried on by the limited partner in the limited partnership that is made against the limited partner’s statutory income from any other source;

(c)

any transferred deduction transferred by the partner; or

(d)

any carry‑back deduction allowed to or transferred by the partner,

as the case may be;

“transferred deduction”, in relation to a limited partner of a limited partnership, means any allowance arising from any trade, business or profession, or any loss incurred in any trade, business, profession or vocation carried on by the limited partner in the limited partnership that is transferred by the limited partner to a claimant company under section 37B or to a spouse under section 37C.[39/2017; 41/2020]