ACCOUNTS OF AN INSOLVENT BUSINESS

ACCOUNTS OF AN INSOLVENT BUSINESS

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My client was a partner in a wholesale fish business which went bust in Nov 2001.

The last set of accounts prepared by his previous accountants were for the year ended 30 April 2001.

He now trades profitably as a fish and chip shop and I have just prepared the first set of accounts for this business for the 56 weeks ended 30 April 2002.

I am looking to finalise his 2001/2002 Tax Return.

With regard to the insolvent business:

Should I attempt to prepare accounts for the final period of trade to 30 Nov 2001 and report the cessation on the tax return.
(I am not currently aware of the overlap relief available for the partners).

Or, should I contact the Revenue and see whether they are prepared to accept a no gain/loss for the final period.

Or, should I use the information prepared by the Liquidator to guessimate the losses for the final period of trade and use these in the Tax Return.

Or any other ideas bearing in mind I want to get paid for this work!!

John Monaghan

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By neileg
05th Aug 2002 09:09

A reply from the tax duffer
Since no one else is answering:
The taxpayer will be submitting a SA tax return. There is no requirement to include accounts with an SA return, you only need to be able to supply sufficient information to back up the return in the event of an enquiry.

You can therefore take whatever steps you and the client consider appropriate to determine the figures required on the return. Do you think the client would be satisfied with a no profit/no loss?

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