Overlap relief

Overlap profits

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Hi,

Partnership started 14/9/1994. It now ceased trading and I am trying to find the overlap profit for each partner.

The information that I have is the share of profit for accounts year end 15/9/1996 was £19,074, TR 5/4/1996. I have no figures for the previous year.

share of profit for year end 15/9/1997 was £22,799.

What should the overlap relief be, £19074/365x201? 

Thank you

 

Replies (11)

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By philomena
23rd Jul 2020 15:31

I have requested in the past this information from HMRC and they have given me the figure.

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Replying to philomena:
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By nic1995
23rd Jul 2020 16:49

Phoned HMRC to ask for figures for 1995, they said they don’t have them

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Replying to nic1995:
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By more rain
24th Jul 2020 10:05

I assume that there was no entry in the box on the tax return, which is why HMRC do not have any figure to provide.

The oldest tax return I had for a client was 2007, the overlap figure was in the carried forward box.

HMRC confirmed the same figure was on the 1996 tax return.

I do wonder if your client will get a tax check if you claim overlap relief without stating the brought forward amounts on historic tax returns.

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By Tax Dragon
23rd Jul 2020 15:52

No, assuming that the trade started with the partnership (and the partnership did not start say by conversion of a sole trade.... ooh, that could be interesting!)

Starting (trade) after 5 April 1994 meant they went straight onto current year basis. I'm surprised it's not on the (personal) TRs before you (it won't be on the partnership one), but you need the previous figures. Or more info re commencement.

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Replying to Tax Dragon:
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By nic1995
23rd Jul 2020 16:51

It stared with the partnership and ceased the same. Husband and wife 50 each share of profit. What figures do I need? Asked HMRC they don’t have the info for 1995 year end

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Replying to nic1995:
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By Tax Dragon
24th Jul 2020 10:18

1994/95 tax would be based on commencement to 5/4/95. 1995/96 tax would be based on first set of accounts (y/e 14(?)/9/95... I am finding your dates confusing).

Thus it's the 14(?)/9/95 profit that has been taxed twice (in part) and it's that double tax that is the basis of the overlap relief. You say you have the 5/4/96 tax return. That's the one you need, as it has the 14(?)/9/95 profits.

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Replying to Tax Dragon:
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By Tax Dragon
24th Jul 2020 10:25

One more point. IIRC (there was a thread on this recently), TOLR was calculated before CAs. You don't have TOLR, you have real OLR. So that would be based on profit after CAs.

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By more rain
23rd Jul 2020 15:55

I have requested the overlap figure for two clients in the last month and HMRC provided both.

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By Tax Dragon
23rd Jul 2020 15:59

Hold on, hold on... TR5/4/96, y/e 15/9/96? That's future year basis of assessment... that's from the 2035/36 tax year.

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Replying to Tax Dragon:
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By nic1995
23rd Jul 2020 16:53

Sorry, you mean 1995/1996? You said 2035/36?

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By Tax Dragon
23rd Jul 2020 19:08

If you have the 5/4/96 tax return, that'll have the Sept 95 y/e figures, no?

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