Partnership LLP with 2 partners in a business with £100k profits. Partner split is 60%: 40%, but one partner provides all the working capital and charges the LLP interest on the working capital which is to be paid before the partner profit split. So profits £100k less interest of £25k leaves £75k for 60:40 split. 60% partner this gets £45k and 40% partner gets £30k share of profits plus interest of £25k so total £55k.
Struggling to see how to disclose this on SA800 software - do I adjust the percentage split to force the money value of split between partners to get £45k:£55k or is there another way?
Many thanks for any help.
Replies (2)
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You don't need to show all that detail. Just show the total and how much of it each partner gets. How it's arrived at is none of HMRC's business.
As lion says.
it isn't really interest, it is simply a method for calculating the final profit split.
Just show your final calculated figures on the partnership tax return.