HMRC is consulting on proposals to clarify the tax treatments of general and limited partnerships.
The consultation covers areas where the government has identified that the tax rules may be seen as unclear or produce an inappropriate outcome.
These areas comprise:
- clarification of who is the partner chargeable to tax
- business structures that include partnerships as partners
- investment income – tax administration
- trading and property income – tax administration
- allocation and calculation of partnership profit
The object of the proposals is to remove uncertainty by making the calculation and reporting of partnership profits clearer for taxpayers, HMRC said.
“This will prevent unnecessary costs for compliant taxpayers and reduce the scope for non-compliant customers to avoid or delay paying tax. It will have no effect on the vast majority of partnerships. It seeks to provide clarity in particular circumstances where the current rules are seen as creating uncertainty,” it said.
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