8 Partnerships Flashcards Preview

F6 Taxation > 8 Partnerships > Flashcards

Flashcards in 8 Partnerships Deck (8)
Loading flashcards...
1
Q

What is the definition of a partnership?

A

A partnership is a body of persons carrying on business together with a view to profit.

2
Q

What is the basis of assessment in a partnership?

A

Each partner is assessed on his share of the partnership profits as if he were a sole trader.

3
Q

What are not allowable expenses for partnerships?

A

Partners’ salaries and interest on capital are not deductible expenses in the adjustment of profits computation, since these are merely an allocation of profit.

4
Q

How is profit allocated?

A

The balance of profits remaining after the allocation of any salaries or interest will be allocated in the profit sharing ratio (PSR).

5
Q

What happens if a partnership changes its basis of profit sharing during a period of account?

A

Period is split, with a different allocation of profits in the different parts.

6
Q

How do you determine the assessable trading profits?

A

For the partner joining, they must apply the opening year rules

7
Q

What is a LLP?

A

An LLP is a special type of partnership where the amount that each partner contributes towards the partnership losses, debts and liabilities is limited by agreement.

8
Q

What is the taxation implications of an LLP?

A

Generally taxed in the same way as other partnerships, normal loss reliefs are available