Share of Profits - Partnership

[karen_1978]

If I am in a partnership with my husband, am I able to share the profits between us in the most tax efficient manner?

In previous years we have split 50/50, but this year due to other income on my husbands side it is more efficient to give the lions share to myself. Is this ok?

[JamesCartwright]

You could benefit from using a limited company instead, have a look at these pages for more information:

http://www.whitingandpartners.co.uk/content/company_v_sole_trader_tax_comparison.htm
http://www.squidoo.com/set-up-a-limited-company

I don't know about your income, so I cannot give advice, but it may be worth considering as there can be tax advantages (among others) to using a limited company.

James.

[Blackberry]

There can be advantages to using a ltd company but, James, is this answering the question?? This just seems to be a shameless plug for your services. :rolleyes:

To answer the question!

Yes you can change the profit split each year provided your partnership agreement states this there is little HMRC can do. If you haven't got a partnership agreement in place i would suggest drawing one up now.

If you haven't got an accountant i would advise you to get one as they will be able to help you organise the business in the most tax efficient way......and this may be a company!:D