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MARK MCLAUGHLIN considers the tax implications of disputes regarding partnership profit allocations and their resolution
KEY POINTS
- The sharing and calculation of partnership profits and losses.
- The partners’ obligation to declare their share of profits.
- HMRC’s new policy in ‘exceptional’ cases of dispute.
- Reconciling the partnership return with the partner’s individual obligations to make a correct and complete return.
- Recent cases and HMRC’s amended guidance.
Partnerships can give rise to rather tricky tax issues. It can sometimes even be difficult to establish the existence of a partnership in the first place as opposed to a joint venture (RJ Phillips v HMRC [2010] SFTD 332).
in her recent article Medical examination Heather Miller looked at the basis periods and assessable profits of medical practitioners admitted into partnership.
The allocation of partnership profits between its members can cause problems as well. This...
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