sole trader losses c/f to partnership

sole trader losses c/f to partnership

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I have a client who traded as a plumber he was a sole trader and made losses in the first year.

He now trades as a partnership with his wife and has made a profit. It's the same trade just different structure.

Is it possible to bring forward the losses made as a sole trader to offset against his share of the partnership profit.

Cheers!

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By MJShone
24th Nov 2011 14:26

It's a continuation for tax purposes

Going from a sole trade to a partnership (or, indeed, vice versa) is treated as a continuation for tax purposes so losses can be c/f against his share of the partnership profits.

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By divelegend
24th Nov 2011 14:53

Thanks

I thought as much but thanks for confirming!

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By DMGbus
24th Nov 2011 15:49

Don't overlook carry back option

Tax losses in early years of a trade can also be carried back three years for offset against other income (such as employment income).

This is an option worth exploring with a view to preserving future personal allowances and boosting cashflow tax-wise now rather than in the future.

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