Previous accountant has not documented overlap profits on the 2014/15 partnership tax return. Due to cessation, relief will be required in 2016/17 but I am concerned that there may be difficulties. Is it necessary to amend 14/15 tax returns for all 12 partners as well as the partnership or would HMRC be unlikely to kick up a fuss given that it is perfectly obvious from the accounting periods that overalp profts have been created? I have a feeling that I know the answer to this one but am hoping somebody out there can convince me that I don't have to add 13 tax returns to my ever growing deadline list! Many tahnks in advance to any/all who can assist.
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Whenever I've inherited jobs with no recorded overlap profits I've simply stuck the figure in as a brought forward on the next return filed and never had any issues. If we don't know the profits, then HMRC have always been able to help
Why the partnership return?
Given 16/17 you could always ask HMRC re each individual, you have time.
Do you know when each partner became a partner, have they all been partners since inception?
How would you expect the previous accountant to document overlap profits on the partnership tax return? Surely each partner would have their own record, and these won't necessarily be the same.
Are they equal shares or do you have 12 different calculations?
If the former I would calculate it then insert into b/fwd box on 15/16 individual returns, if you want type a short calculation and then copy/paste this into the white box re each partner.
If the latter then a bit more work.
Does overlap relief need an earlier year timeous claim or is it merely a mechanical calculation?
http://www.legislation.gov.uk/ukpga/2005/5/pdfs/ukpga_20050005_en.pdf
S 204 onward maybe suggests it is mere mechanics of calculation, albeit earlier year tax returns may be wrong.
I will leave the question for Portia/Similar to answer as my knowledge of the Taxes acts re this point is nowhere near good enough.
I agree that there seems to be no requirement to enter it on the second return (ie, the year in which overlap is created).
However, still a week to go and a "belt and braces" approach is still possible.
For the avoidance of doubt, the overlap relief goes on the personal returns, not the partnership return.
That's because partners may not join at the same time and may not have equal shares - although that doesn't seem to be in point here.
Check with HMRC to see if they've created a record - if not, establish the overlap relief now. Should be pretty easy to recover - it's not all that far back into history.
You still have a week to amend the 2014/15 returns, which are the returns where the overlap should have appeared.
Had the same problem.
Telephoned HMRC and asked for overlap profit figure from years ago and HMRC supplied it no trouble at all.
Think you need to fill in full pages rather than short to record overlap figure though.