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Partnership to Sole Trade - Process and Forms?

1 partner has died, remaining partner to carry on trade. What is correct process/forms?

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We have a VAT registered Scottish partnership with 2 partners. One partner has since passed away, leaving the remaining partner to carry on the trade themselves. In real, practical terms, the remaining partner ran the business themselves anyway for the last few years as the partner who had passed away was unable to work. 

HMRC has said that in this circumstance, the partnership is automatically dissolved and the remaining partner must re-register as self employed as a sole trader, and presumably re-register for VAT.

Presumably the trade is transferred to the remaining partner as a Transfer of Going Concern (TOGC).

I have also seen on HMRC that we can transfer the VAT registration using form VAT68; from the partnership to the sole trade. 

We also run the bookkeeping, VAT and accounts on Xero.  Presumably I can keep the same account running as it is the same business and trade for all intents and purposes. 

As a Scottish Partnership is a separate legal entity, should we close the bank and re-open as a sole trade, or can we retain this?

Is there anything else that I have overlooked that I need to consider?

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By lionofludesch
07th Oct 2020 11:18

You can transfer the VAT registration. You may be happy to do so. But it's not obligatory.

I think you will need a new bank account. Do whatever the bank says here.

HMRC are spot on about reregistering as self-employed.

You may or may not wish to prepare accounts to date of death. I probably would, just to see if there's any advantage but there's obviously an accountancy cost.

One key point you've not mentioned - what does the deceased partner's will say ?

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Replying to lionofludesch:
By mikefwbray
07th Oct 2020 13:27

Thank you.

Deceased partner has transferred their partner account in full to remaining partner (they are family).

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