Property partnership

25 April 2007

Issue: 4105 / Categories: Forum & Feedback

A 'partnership', which comprises six members of a family, over two generations, owns a property which has been let for some years. Rental income has been declared on each individual's tax return.
The 'partnership' has been VAT registered for some years in anticipation of undertaking the development of the property. There is a partnership agreement relating to the development and the profits will be taxed as Schedule 'D' income in 2007/08 and 2008/09.

A 'partnership' which comprises six members of a family over two generations owns a property which has been let for some years. Rental income has been declared on each individual's tax return.
The 'partnership' has been VAT registered for some years in anticipation of undertaking the development of the property. There is a partnership agreement relating to the development and the profits will be taxed as Schedule 'D' income in 2007/08 and 2008/09.
Some of the partners are employed (some at higher rate) some are self employed and some are unemployed. We are interested in confirming the National Insurance position for each partner. Do the employed partners have to make Class 2 contributions as well as Class 4 and do we have to notify HMRC of the partnership's existence when it starts trading even though it is already VAT registered?
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