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How to work out the overlap relief

A partnership has changed its accounting year end - how do I work out the overlap relief

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I am preparing the tax returns of the partners where the partnership changed its year end from 31st March 2019 to 30th June 2019

I have a 15 month period and I think the basis periods are

1. for 2018/2019, 12/15th's of the profit for the period to 30/6/19

2. for 2019/20 , 12/15ths of the profit for the period to 30/6/19

3. for 2020/2021, 12 months to 30/6/2020

How do I work out the overlap relief?

 

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RLI
By lionofludesch
29th Jan 2020 15:18

Draw it out on a time line and it's obvious.

9/15 of the long period which is the bit that's been assessed twice.

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By AnnAccountant
29th Jan 2020 16:39

If only people wrote books explaining how the tax legislation works - or perhaps wrote technical guidance that they put on the internet for professionals to read. Or, perhaps, packaged it into courses and had exams at the end.

I think there could be demand for the above. Whoever implements it could make some money.

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By Paul D Utherone
29th Jan 2020 17:55

andrewMo wrote:

How do I work out the overlap relief?

 

Work out what profits have been assessed twice
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By Paul Soper
03rd Feb 2020 11:50

You work it out separately for each partner - find the profit of the long period but this is NET of capital allowances, apportion between the partners in PSR - 9/15ths will give you the individual overlap relief for each partner.

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