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Partnership overlap profits.

I have a client who has overlap profits available from a partnership which he is no longer involved in. He ceased to be a partner in February 2008, the overlap profits were carried forward on the return to 5 April 2008, but no overlap relief shown on return to 5 April 2009. Can I put them in the return to 5 April 2010? If so, where? He is self employed now.

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06th Jan 2011 14:04

Overlaps profits

should have been crystalized in the year he ceased to be part of the partnership.  So his 07-08 return should have shown his share of the partnership profit less the overlap profit.  If this hasn't been done then you will need to correct the 08 Return.  (the use/creation of overlap profit is not optional, it must be set off in the year in which he ceased as a partner).

 

 

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By goblinf
06th Jan 2011 14:29

Error or Mistake Claim

The claim needs to be made within the deadlines, which usually expire on 31 January each year.  As I don't have the relevant books to hand to give you the deadline for that tax year (around 4-5 years I think? so you're probably ok for this one), I recommend you look it up and make sure you won't miss the deadline if you leave it until after your tax return rush is over!

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