PTP PTR/TR - Partnership entries where there is a change of Accounting Period as a result of Basis Period Reform

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PTP PTR/TR - Partnership entries where there is a change of Accounting Period as a result of Basis Period Reform

21st May 2024

As a result of the Basis Period Reform, many Partnerships will be amending their Accounting Period ends to match the new Basis Period.

This example relates to a Partnership which previously had a December year end so the last accounts were made up to 31/12/2022.  The new year end is going to be 31st March.  The following is the data entry required for the 2023-24 returns.

1. The Partnership Accounting Period is entered as 01/01/2023 to 31/03/2024

2. All data entry should relate to the extended accounting period.  In this example there is a Partnership profit of £30000 for the 15 month period.

3. If there is only Trade income a new tick box will appear in the screen to allocate the income to the partners (please note this tick box was introduced in the May release, 24.1.231, and will only appear if the software would ordinarily default to the short pages on the Individual return).

4. On the partner’s Partnership supplementary page, the Basis period end date is the end of the tax year 05/04/2024.

5. An adjustment is made in box 9 to arrive at the figure for the Standard Profit i.e. to apportion the profit to the correct 12 month figure.  In this example that is a negative adjustment of £3000 to arrive at a 12 month profit of £12000.

6. The transition portion of the profit is entered in box 16.1.

7. Any overlap relief to be deducted is entered in box 16.2. (Please note if the overlap relief b/fwd is higher than the transition profit, the higher figure should be entered here and the software will automatically utilise the remainder against the standard part of the profit.)

8. Box 16.3 must be a minimum of 20% of box 16.1 minus box 16.2, but a higher figure could be entered if desired.

Within the Tax Calculation Summary, the Standard Profit and Transition Profit will show in separate places.  Only the Standard Profit will be listed in the Income section at the top.  The Transition Profit shows as part of the tax calculation breakdown below.