First partnership return

by **Kitty Kat** on Fri Oct 21, 2011 2:06 pm

Incredulum wrote:The individual partner is instructed to copy the figures from the partnership tax return onto his own tax return.

Therefore, if the individual partner is required to report overlap profits, surely the partnership tax return has to as well in order that he has numbers to copy across onto his own return?

That makes sense, I like your logic

by **PracticalTax** on Fri Oct 21, 2011 2:29 pm

Although it might be logical, I'm not convinced it is correct.

- The partnership return reports the profits of the tax return;
- The partner copies the profits onto his personal tax return;
- The partner then considers s196 et seq ITEPA to calculate his overlap profits;
- The partner reports his personal overlap profits on his personal tax return.

This is how I've always understood it to work. In addition, there is nowhere on the partnership return to report overlap profits - the boxes for this only appear on the partner's personal supplementary page (and the boxes where you do a copy and paste say in them "From box X on the partnership statement").

by **towat** on Fri Oct 21, 2011 2:46 pm

Not all partners will have the same overlap profits or indeed basis period as the parnetship, as partners can join or leave a partnership at different times.

by **Incredulum** on Fri Oct 21, 2011 3:38 pm

Can anybody enlighten me as to what is the point of a partnership return?

by **Tax Champion** on Fri Oct 21, 2011 3:43 pm

As overlap profits are calculated by reference to the individual's basis period, which is not necessarily the same for both partners ( such as when a sole trader takes on a partner mid-year) the overlap is not taken from the partnership return, but by looking at the assessable profits for each partner over the years concerned.
As regards the partnership return, yes, it should be completed to show apportioned/estimated figures for the period to 5 April, then the full accounts on the second return.

what is the point of a partnership return

- how about another opportunity for late filing penalties?

by **PracticalTax** on Fri Oct 21, 2011 3:45 pm

See s12AA TMA 1970 which sets out the purpose of a partnership tax return.

We seem to have gone off topic. The question is does the partnership have to file a tax return for the period from commencement of trading to the following 5 April even if no accounting period ends in that period. Everyone seems to be in agreement that the answer is yes and that you put an apportionment of the profits on it.