Partnership Tax Returns After Seperation.

[izeickl]

My mother and father seperated after selling their hotel business and he moved out of the country, she lives with me now and has recivied letters about tax returns for end of april 5th 2002 (hotel sold in Dec 2001), it was a partnership they had, but he dealt with all accounts and tax issues so now she does not know what to do, some fines have all ready been applied for the late return, but it is simply impossible for her to fill out the form because she has no record of accounts or any information from the business. What are her options in explaining this? She currently does not know where my father is and I have been supporting her since. It was a really bad year what with foot and mouth and closing the hotel, we just want to get things paid out of the way move on. But what can we do if she has no idea about income for the period and no money of her own bar my support?

[accountant@uktaxshop]

Unfortunately this is going to get rather messy.

As you father is absent, the whole of the tax due from the partnership can be claimed from your mother, as she will normally have "joint and several liability" for the debts of the partnership.

There are two potential taxes arising

1. Income tax for the year to 2002
2. Capital Gains tax on the sale of the business.

Presumably the IR are only after the former at this time, but will be after the later in due course.

As you do not have any records, the amount due will have to be negotiated with the IR, from the previous years assessments. I donÂ’t know if you mother can prove the drop in occupancy from other sources - eg any booking records you may have.

I would suggest you appoint an accountant locally to help you sort this out, and argue your case. At the end of the day it is going to come down to a negotiated settlement with the IR. I am in Bury St Edmunds, if this is of any help to you. I normally work remotely but I can foresee this would be better suited to someone local, and probably someone who is specialist in the area of investigations.

I would urge you to take advice sooner rather than later as the fines will only accumulate over time.

Regards

James Smith
Chartered Accountant
www.uktaxshop.co.uk
01284 764436