Help please with Partnership Tax Return

[Chris4444]

I was hoping someone may be able to help me as I am just completing our partnership tax return for the first time. I have done 99% of it and am quite proud I might add! However i am stuck on the "partnership statment (short)" section. Unfortunatly we made a loss in our first year of trading and i don't know how i am supposed to apportion it between the two partners, does it make a difference?

Incidentally my wife took drawings earlier in the year, do these have to be declared in her personal tax return, as overall we made a loss for the year?:|

Any help would be much appreciated?

 

[MyAccountantOnline]

Please see an accountant - the money you spend will be a wise investment. An accountant can look at the losses for you and see what can be claimed. The apportionment will depend on many factors and may even give rise to some tax refunds.

Drawings for a sole trader or partnership do not effect profits or losses - if you have included them to arrive at a loss you are incorrect.

 

[elaine@cheapaccounting]

Your apportion the losses in relation to the partnership agreement - i.e. what share of the business each of the partners has.

Do bear in mind that the loss can be offset against other income if you have any - so you might want to get some advice on it.

 

[Chris4444]

I have not included the drawings as stated above. Thank you for your response.

 

[Chris4444]

Many Thanks for your response. The partnership is a 50% split so I guess I should just apportion the loss equally.

As there is no other income into the partnership i presume it should be straight forward.

On the same thought the intention of the business is to create enough income to enable my wife to stop work. So going forward any profits we make would be apportioned to her, as my earnings are already in the 40% bracket and so it would make sense for her to pay less tax. On the same thinking should i not just apportion the loss to her?

 

[CertaxBexley]

Hold on, you made a loss, but have other taxable income - you need to seek guidance on completing your SA tax returns

 

[elaine@cheapaccounting]

On the same thought the intention of the business is to create enough income to enable my wife to stop work. So going forward any profits we make would be apportioned to her, as my earnings are already in the 40% bracket and so it would make sense for her to pay less tax. On the same thinking should i not just apportion the loss to her?

I would suggest getting some tax planning advice here as the losses can be used to reduce the tax on other income.

 

[Jenni384]

I would suggest getting some tax planning advice here as the losses can be used to reduce the tax on other income.

Absolutely, I can spot various tax planning issues from your post - see an accountant, it will be money well spent.