Partnership Tax Return - One partner has died part way through the tax year

BigBlueSky

A family member is registered as a partnership with HMRC along with their wife and their son.

His wife has sadly passed away in September and HMRC has sent through a 'Tax return for year of death' SA100 along with the Partnership (short) SA104S form.

I'm trying to help him and wondering how the split for the partnership should be calculated.

Normally the husband and wife have a 45% share each with the son having the remaining 10% share.

Although the tax return would be until the date of death (28th September) the tax year runs until April.

Would the partnership figures all be calculated as normal (have to wait until 6th April), but if this is so how would we decide what the share was until the date of death ? - Would you deduct the amount of days following the death until the end of the tax year ?

Or would we need to almost do the tax return as though the end of the period was the date of death ?

I also assume on the partnership form we would put that the deceased left the partnership on the date of death ?

Usually the partnership return calculates the share for each partner based on the percentage specified (45%/45%/10%), but obviously this would be for the full tax year.

Sorry if this sounds confusing, but just trying to get our heads around the situation.

Any help or guidance would be appreciated.

[Deleted User]

You are correct in that you wait for the figures accounting period to 5th April 2022. The profits attributable to her will be 45% of the full years profits multiplied by 181/365 - 28th Sept is 181 days into the tax year.

Don’t forget that there will be a recalculation of the remaining partners share for the remainder of the tax year. 

The date of death would be entered as the date of leaving the partnership.

The personal return for the deceased will cover the period from 6th April to 28th September.

BigBlueSky

Great, thanks for the reply - That makes sense.

I assume the remaining partners share for the remainder of the tax year should automatically be calculated via whichever partnership return software is used ?

[Deleted User]

BigBlueSky said:

Great, thanks for the reply - That makes sense.

I assume the remaining partners share for the remainder of the tax year should automatically be calculated via whichever partnership return software is used ?

It would depend on the ratio. Is it 50:50 from 28 September? It can be whatever they choose.

BigBlueSky

They are still trying to decide that.  It will either be 50/50, 60/40 or 70/30.

[Deleted User]

BigBlueSky said:

They are still trying to decide that.  It will either be 50/50, 60/40 or 70/30.

OK. If 50:50 father’s share of profits will be 

6th April to 28 Sept - Full year profits x 45% x 181/365.

29 Sep to 5 April - Full year profits x 50 % c 184/365

Add both.

BigBlueSky

Great - Thank you, I appreciate that.