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Treatment of partner's SEISS grants

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Where a partner's SEISS grants gets paid directly into the partnership bank, the grants should be treated as partnership income, which means they're not shown seperately on the individuals tax return. I'm wondering if this is going to generate problems with HMRC? Is there anything wrong with treating the grants as capital introduced and then including them on the individuals return? 

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By AdamMurphy
28th Sep 2021 14:39

It's Capital Introduced for a partnership. SEISS grants are paid purely to individuals. What bank account that goes into is a different matter and not related.

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Replying to AdamMurphy:
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By Paul Crowley
28th Sep 2021 15:47

Not so sure about that
But that is what I will do should any partnerships have chosen that route
My understanding was that Partnerships were a bit different

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Replying to AdamMurphy:
By Duggimon
28th Sep 2021 16:10

It could be treated as capital introduced and use the same treatment as with sole traders, or it could be treated as partnership income and treated as income of the partnership, taxed on all partners based on their profit share under the normal accounting period rules.

The determining factor is how the partnership agreement determines how the grant is to be treated. The more likely outcome is that it's a personal grant and ought to be treated as capital introduced, but either is possible.

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Replying to Duggimon:
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By Geoff56
28th Sep 2021 17:04

Spot on.

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By pauld
28th Sep 2021 18:03

The grant is shown as a separate entry on the partners personal tax return, which I assume will need to match HMRC records. I would be treating it as capital introduced as if its treated as partnership income and split between partners, then that would appear to tax it twice and would confuse the hell out of me. Keep it simple - cap introduced.

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Replying to pauld:
By Duggimon
29th Sep 2021 09:04

It is one thing or the other, if the partnership agreement determines it is partnership income then that's what it is, it's added to turnover and doesn't appear on the individual returns, it's not taxed twice.

I don't know how HMRC will deal with it if that's the case, I wouldn't be at all surprised if they make a mess of it, but the situation is provided for in the legislation, it's not necessarily always individual income.

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Replying to Duggimon:
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By pauld
29th Sep 2021 09:39

I guess its a recipe for disaster. HMRC would ignore any white space disclosure and amend the personal return if SEISS box does not match their records. Appeals in writing probably ignored for months. A phone call probably result in them telling you you need to amend the personal return to show correct SEISS amount.
Isn't tax fun?

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By daviddaniels
29th Sep 2021 10:09

Thanks for the replies. I'd seen different views on where to include the grants, but I think including them as capital introduced and then showing them separately may avoid confusion.

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Replying to daviddaniels:
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By Paul Crowley
29th Sep 2021 14:13

Partnerships have the advantage of matching the SEISS with the period of loss for those with non tax year accounting reference periods

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