| Commentary

35.2 Income tax

| Commentary

35.2 Income tax

The sale or winding up of a partnership will obviously lead to the discontinuance of the existing trade and so the closing year rules will apply1. In the last tax year of the business, broadly each partner will be taxed on his share of the partnership’s trading profits from the end of the last accounting period to the date of discontinuance, less any overlap profit2.

As mentioned above3, the same result will occur when a partner leaves an ongoing partnership, but only in respect of that outgoing partner. For the purposes of applying income tax rules to partnerships,

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