PTP Tax Tip No 19 - Merger of partnerships
Q. My two partner solicitors firm merged with a four partner practice on 1 May 2006. Both firms had 30 April year ends and the merged practice will continue to prepare accounts to that date; the succession rules will apply. Each firm reflected UITF 40 adjustments in their respective 30 April 2006 accounts. My firm had always billed regularly all work in progress at the end of each month and the impact of UITF 40 was negligible however the other firm had a material adjustment. What will be the impact of the spreading rules on the new partnership?