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Where Taxpayers and Advisers Meet

Profit split between unmarried couple

TRose
Posts:3
Joined:Wed Jul 20, 2022 9:22 am
Profit split between unmarried couple

Postby TRose » Wed Jul 20, 2022 9:25 am

Hi All

I have a partnership client and they are an unmarried couple. Are they entitled to split the partnership profit in the most tax efficient way or as they are unmarried stuck with 50/50? I feel I've read somewhere it is 50/50 but can't now find any answer one way or the other.

Appreciate your time and help.

Jholm
Posts:360
Joined:Mon Mar 11, 2019 4:22 pm

Re: Profit split between unmarried couple

Postby Jholm » Thu Jul 21, 2022 12:11 pm

Is there a partnership agreement to refer to?

TRose
Posts:3
Joined:Wed Jul 20, 2022 9:22 am

Re: Profit split between unmarried couple

Postby TRose » Thu Jul 21, 2022 12:45 pm

HI
Afraid no agreement in place. Vaguely remember the rule about unmarried couples.

Jholm
Posts:360
Joined:Mon Mar 11, 2019 4:22 pm

Re: Profit split between unmarried couple

Postby Jholm » Thu Jul 21, 2022 3:32 pm

Please don't take this gospel and check, as I do not claim to know the full ins and outs.

BUT

At the back of my mind, I feel like in the absence of a partnership agreement, it defaults to the partnership act 1890, which says partners get equal shares.

Happy to stand corrected however.

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Profit split between unmarried couple

Postby pawncob » Fri Jul 22, 2022 10:03 am

Yes, the Partnership Act applies, but the profit can be split anyway the partners decide.
https://www.gov.uk/hmrc-internal-manuals/partnership-manual/pm137000
With a pinch of salt take what I say, but don't exceed your RDA

TRose
Posts:3
Joined:Wed Jul 20, 2022 9:22 am

Re: Profit split between unmarried couple

Postby TRose » Fri Jul 22, 2022 10:17 am

Thank you for help and direction.


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