Joint rental income on partnership tax return

Business transferred as going concern, building still owned and rented to third party

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A husband and wife partnership ceased trading and transferred their business as a going concern. They still own the building and rent out to a third party, who also bought all the tools and equipment. Does this rental income still have to be reported on a partnership tax return, or should 50% be included in the rent section of each of their personal tax returns? Happy January!

Replies (10)

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By Wanderer
10th Jan 2024 13:10

Property pages of personal SA returns.

Makes sure the partnership SA record is closed to save dealing with annoying penalties.

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By Tax Dragon
10th Jan 2024 13:18

When you say "still"... do you mean that?

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Replying to Tax Dragon:
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By moneyandchoice
10th Jan 2024 15:47

Yes, they owned the building when they were trading from there, and continue to own it now. Their tenant bought all the equipment and took over the employees.

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Replying to moneyandchoice:
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By FactChecker
10th Jan 2024 18:19

Just to hammer home TD's point about ownership ... when you say "they", do you mean as individuals or via the partnership?
If I'm being unclear - who purchased the building? And what does it show at Land Registry?

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Replying to FactChecker:
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By moneyandchoice
10th Jan 2024 18:36

Sorry, should've specified - original building bought by one of the partners when he was operating as a sole trader, before his wife became a partner in the business. Since trading ceased they've jointly bought another unit in same yard which is rented by same tenant. Both buildings are owned by the individuals with no mention of the trading partnership on the deeds.

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By Tax Dragon
10th Jan 2024 18:51

Sorry for my own unclearness.

I was wondering whether this income commenced after the trade ceased. I might've said "still" if - but I think only if - the partnership had declared such rents before.

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Replying to Tax Dragon:
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By Wanderer
10th Jan 2024 18:54

I read the OP as if the partnership operated the business from the relevant premises, sold the business, then rented the premises to the people that bought the business.

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Replying to Wanderer:
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By moneyandchoice
10th Jan 2024 19:06

Wanderer wrote:

I read the OP as if the partnership operated the business from the relevant premises, sold the business, then rented the premises to the people that bought the business.

Yes, that's the case!

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Replying to moneyandchoice:
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By Tax Dragon
10th Jan 2024 21:04

I thought that was what you meant (and, while I've stopped commenting on VAT - because I know enough to know that what I know makes me dangerous - the "going concern" assertion supported that reading in my head)... but as I said your "still" was enough to make me question.

On Wanderer's reading, I agree with Wanderer.

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Replying to Tax Dragon:
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By moneyandchoice
10th Jan 2024 21:26

Thanks for the advice. Love the idea of VAT knowledge making you dangerous, btw!

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