partnership are the same as for a sole trader.
(b)
The profit is allocated between the partners for accounting periods and then the assessment
rules are applied.
(c)
Each partner is e
ff
ectively taxed as a sole trader on his/her share of the adjusted trading profit.
(d)
Continuing partners will be assessed using CYB.
(e)
When a new partner joins a partnership, they are treated as commencing a new trade and
hence the opening years rules apply.
(f)
When an old partner leaves a partnership they are treated as ceasing a trade and hence the
closing years rules apply.
(g)
Each partner has their own overlap profit available for relief.
7. A change in the membership of a partnership (a)
As long as there is at least one partner common to the business before and after the change,
the partnership continues.
(b)
The commencement or cessation rules apply ONLY to the individuals joining or leaving the
partnership.
Example 2 Ann and Beryl have been in partnership since 1 July 2020 making up their accounts to 30 June each
year. On 1 July 2022 Clair joins the partnership.
The partnership’s trading profit is as follows:
Profits are shared equally.
Show the amounts assessed on the individual partners for all relevant tax years of assessment. £ Year ended 30 June 2021
12,000
Year ended 30 June 2022
14,000
Year ended 30 June 2023
24,000
77
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