ACCAF6四川大学工商管理学院(3)

1、Chapter 11: Partnerships and Limited liability partnerships1 Partnerships2 Loss reliefs3 Limited liability partnerships精选ppt1 PartnershipsA partnership is treated like a sole trader for the purpose of computing its profits. If any of the partners are entitled to a salary or interest on capital, thes

2、e salaries and interests are not deductible expense since these are allocation of profit. Notes: Order of profit allocation are 1. salary or interest on capital 2. balanceOnce partnerships profits for a period of account have been computed, they are shared between the partners according to the profi

3、t sharing arrangements for the period of account concerned. 精选pptChange in profit sharing arrangementsIf the profit sharing arrangements changes during some period of account, the profits, salaries and interest for the period of account must be pro-rated accordingly.精选pptQuestion: The allocation of

4、the profit or loss David and Peter are in partnership. Their tax adjusted profit for the year ended 30 September 2011 was 16,500. Up to 30 June 2011 profits were shared between David and Peter 3:2, after paying salaries of 3,000 and 2,000. From 1 July 2011 profits were shared 2:1 after paying salari

5、es of 6,000 and 4,000. Show the allocation of profits for the year ended 30 September 2011.精选pptAnswer: Total David Peter 1.10.10 to 30.6.11(Profits 16,5009/12=12,375)Salaries (9/12) 3,750 2,250 1,500Balance (3:2) 8,625 5,175 3,450 12,375 7,425 4,9501.7.11 to 30.9.11(Profits 16,5003/12=4,125)Salarie

6、s (3/12) 2,500 1,500 1,000Balance (2:1) 1,625 1,083 542 4,125 2,583 1,542Total allocation 16,500 10,008 6,492精选pptTax positions of individual partnerStarts when he joins the partnershipFinishes when he leaves the partnershipHas the same periods of account as the partnershipMake profits or losses equ

7、al to the partners share of the partnerships profits or losses.精选pptAssets owned individuallyWhere the partners own assets individually, capital allowances must be calculated and go into the partnerships tax computation as they must be claimed by the partnership, not by the individual partner.精选pptC

8、hanges in membershipWhen a trade continues but partners join or leave, commencement and cessation rules for basis period (opening and closing rules) only apply to partners individually when they join or leave, the special commencement and cessation rules do not apply to partner who were carrying on

9、the trade both.精选pptQuestion: Changes in membershipAble and Bertie have been in partnership since 1 July 2008 making up their accounts to 30 June each year. On 1 July 2010 Carol joins the partnership.The partnerships tax adjusted profits are as follows: Year ended 30 June 2009 10,000Year ended 30 Ju

10、ne 2010 13,500Year ended 30 June 2011 18,000Profits are shared equally.Show the amounts assessed on the individual partners for 2008-09 to 2011-12.精选pptAnswer:Step 1: Allocate the taxable profits for period of account between partners. Total Able Bertie Carol Y/e 30.6.09 10,000 5,000 5,000 -Y/e 30.6

11、.10 13,500 6,750 6,750 -Y/e 30.6.11 18,000 6,000 6,000 6,000精选pptContinue:Step 2: Compute each partners taxable profits as though they were a sole trader. (basis period rules)Able and Bertie:Year Basis period Working Trade profit 2008 09 1.7.08 5.4.09 5,0009/12 3,750 2009 10 1.7.08 30.6.09 5,000 201

12、0 11 1.7.09 30.6.10 6,7502011 12 1.7.10 30.6.11 6,000They will both carry forward overlap profits of 3,750.精选pptContinue:Carol:Year Basis period Working Trade profit 2010 11 1.7.10 5.4.11 6,0009/12 4,5002011 12 1.7.10 30.6.11 6,000She will carry forward overlap profits of 4,500.精选ppt2 Loss reliefsPa

13、rtners are entitled to the same loss reliefs as sole traders.(a) Carry forward against future trading profits(b) Set off against general income of the same and/or preceding year(c) For a new partner, losses in the first four tax years of trade can be set off against general income of the three preceding years (d) For a ceasing partner terminal loss relief is availableDiffer