What is the definition of a partnership?
A partnership is a body of persons carrying on business together with a view to profit.
What is the basis of assessment in a partnership?
Each partner is assessed on his share of the partnership profits as if he were a sole trader.
What are not allowable expenses for partnerships?
Partners’ salaries and interest on capital are not deductible expenses in the adjustment of profits computation, since these are merely an allocation of profit.
How is profit allocated?
The balance of profits remaining after the allocation of any salaries or interest will be allocated in the profit sharing ratio (PSR).
What happens if a partnership changes its basis of profit sharing during a period of account?
Period is split, with a different allocation of profits in the different parts.
How do you determine the assessable trading profits?
For the partner joining, they must apply the opening year rules
What is a LLP?
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.
What is the taxation implications of an LLP?
Generally taxed in the same way as other partnerships, normal loss reliefs are available