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Where Taxpayers and Advisers Meet

Overlap relief

Milbo
Posts:54
Joined:Wed Aug 06, 2008 4:07 pm
Overlap relief

Postby Milbo » Tue Jan 11, 2011 4:31 pm

More of a comment than a query.

Overlap relief is given where there is a permanent discontinuance or change of accounting date.

I have a client, a partner in a profeesional practice, who has sold 30% of his holding to his fellow partners so instead of receiving 40% of profits he will receive 10%. A sustantial Capital Gain will arise on the disposal.

Based on the above, the partner has suggested that he should, in turn, be able to utilise 30% of his overlap relief. This is clearly not the case given the criteria above but I do see his point.

Given that over the years the monetary value of the relief is eroded, isn't it time representations were made to bring an end to overlap profits?

mullet
Posts:3242
Joined:Fri Nov 06, 2009 9:26 am

Re: Overlap relief

Postby mullet » Tue Jan 11, 2011 7:40 pm

Given that over the years the monetary value of the relief is eroded, isn't it time representations were made to bring an end to overlap profits?
Devil's advocate response - your client was not forced to adopt an accounting date other than 31 March or 5 April.

I don't see how overlap profits could be abolished as such - unless 5 April becomes mandatory as it is for income from property.


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