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What happens to the personal allowance in the year

Is it split?

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I have a client who has had to decalre herself bankrupt. I know that 2 Tax Returns have to be prepared in the year of bankruptcy and that she needs a new UTR. I have tried to find online what happens to the personal allowance in this particular year. Is it split into 2 periods (pre and post bankruptcy)? Can it all be allocated to the period after bankruptcy?

Many thanks.

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By Paul Crowley
19th Nov 2021 13:56

Not sure that is correct
IIRC HMRC just want the one return on the old number
New number for following return

Fairly certain that was what happened last time, but that was several years ago

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By Ardeninian
19th Nov 2021 13:59

SAM121270 (https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam121270):

"All allowances and deductions for the year of bankruptcy, unless they specifically apply to a particular source, are apportioned on the fairest possible basis. This will normally be a simple time apportionment. Where that method results in a balance of unused allowances in one of the periods, you should use only enough to extinguish liability in that period and the remainder in the other period."

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By K81
19th Nov 2021 14:45

unless the client is PAYE then a different system applies & NT code should be issued post bankruptcy.

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