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Overlap relief on long-standing business

Overlap relief on long-standing business

I've taken over a client with a 31 December year end and the previous accountant and HMRC are unable to supply the overlap figure brought forward(!), and it seems sensible to change the year end this year. I cannot remember how to calculate the overlap profit brought forward i.e.which year's profits to use.

Profits are

y/e 31.12.05 £26k

y/e 31.12.06 £28k

y/e 31.12.07 £22k

y/e 31.12.08 £25k

Which year do I use to calculate the overlap profit proportion?

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22nd Feb 2011 12:36

1st January to 5th April

 ... of whatever year in which the client started trading, so if it was 2005, the 2005 profits apportioned to 1st January to 5th April 2005.

Unless the business is so long-standing that it started in 1993/94 or earlier, when it would be the 1997 profits apportioned to 1st January to 5th April 1997.

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By blok
22nd Feb 2011 12:54

.

Remember it will be the tax adjusted profits.

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By RG
22nd Feb 2011 13:02

Perfect!

Thanks, I thought it was, but couldn't find chapter and verse on the matter.

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