HMRC has published its draft guidance on partnership taxation on its website, with a request for comments on its contents.
The draft provides an overview of partnerships and the relevant UK tax regimes, along with references to other manuals containing HMRCs full guidance on the taxation of partnerships. Each section is relatively short; however it is comprehensive in its easy to read coverage of the issues to be covered for partnerships and taxation. The timing of the draft is interesting, as April witnessed the introduction of changes to mixed partnership and limited liability partnership taxation. These developments evidence the complexity of partnership tax and the determination of the Government to maintain the different tax rates applicable to different, though legal forms of business operating structure.
Basic points covered in the partnership manual include:
- self-assessment for partnerships;
- calculation of taxable profits;
- use and restriction of losses;
- mixed member partnerships;
- international aspects;
- use of limited partnerships and limited liability partnerships, including conversions from other forms of entity; and
- indirect, capital and transfer taxes.
The manual is comprehensive and fairly easy to read, with links to the more detailed interpretation of partnership tax covered in HMRC's existing manuals
www.hmrc.gov.uk/manuals/pmanual/Index.htm
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