I have a partnership client where one of the partners has suggested that she pay for an airfare using air miles. The partnership would then reimburse her for the cost that it would have paid for the flight if the air miles had not been used.
My question is that if the firm reimburses her then would the payment be allowable for tax or should it be disallowed in the tax computation. My view is that it would be the latter but would appreciate others views on this.
Would it make a difference if the airmiles belonged to her husband and he then charged the partnership for their use? Presumably though this would result in income taxable on the husband.
There was a similar question to this some time ago (2005) but it related to directors and taxable benefits.
Thanks for your help.
