PDA

View Full Version : Tax Return Question


gibby1
20-05-2004, 12:41 PM
HI,

Just a quick question about my Partnership Tax return. The business made a loss and I need to know if I can give that loss to just 1 partner or do both partners need a figure?

i.e.
Loss £1000
Partner 1 gets £0
Partner 2 gets £1000

Cheers

James Smith
20-05-2004, 01:55 PM
Gibby, the loss would be split equally according ot the partnership agreement, so presumably 50:50.

The losses however can be carried forward or back or used agasint (most) other income this tax year.

Regards,

gibby1
20-05-2004, 01:58 PM
Hi James

What if there is no partnership agreement? The reason we are doing this is cos I dont work so this is my only income but my partner dose work.

Cheers

Carpet3
20-05-2004, 05:45 PM
Gibby,

I hope you dont mind, but i've just emailed you about something you may be interested in.

James Smith
20-05-2004, 05:54 PM
A partnership without a partnership agreement is a difficult starting point. What the IR would look at is your circumstances to the business and what contribution you are both making to this business, what profits have been taken in earlier/future years, what capital contributions have been made etc which will determine who’s income this is.

What you can’t do is arbitrarily shift the loss to your working partner to get the tax relief if you are doing most of the work, and then taken any profits all to you the next year.

It looks like your "quick question" is actually quite involved, there is a question over whether a partnership actually exists, and if it does what is the agreed profit split? (Implied or otherwise).