Capital allowances for partnerships

Produced by a Tolley Owner-Managed Businesses expert

Owner-Managed Businesses

Guidance

This note explains the interaction the treatment of capital allowances for partnerships.

Capital allowances and partnerships

The general rules on which assets qualify for capital allowances (‘eligible assets’) are explained in the Capital allowances ― general requirements and What is plant and machinery? guidance notes.

A partnership can claim capital allowances on eligible assets which are either:

•
owned by the partnership, or
•
owned by an individual partner and used in a trade carried on by the partnership

Both of these are discussed below.

Owned by the partnership

It is not always clear whether an eligible asset is ‘owned’ by the partnership. Most partnerships are not legal entities (see the Partnerships ― overview guidance note), so some assets may be held on trust for the partnership by

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