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gibby1 gibby1 is offline
Maven
Join Date: Feb 2003
Location: Carrickfergus
Posts: 84
Tax Return Question

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
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James Smith's Avatar James Smith James Smith is offline
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Join Date: Mar 2003
Location: Abingdon, Oxfordshire
Posts: 2,044
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,
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gibby1 gibby1 is offline
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Join Date: Feb 2003
Location: Carrickfergus
Posts: 84
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
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Carpet3 Carpet3 is offline
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Join Date: Apr 2004
Posts: 59
Gibby,

I hope you dont mind, but i've just emailed you about something you may be interested in.
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James Smith's Avatar James Smith James Smith is offline
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Join Date: Mar 2003
Location: Abingdon, Oxfordshire
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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 whos income this is.

What you cant 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).
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