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Change partnership to a sole trade

Article ID
ias-12118
Article Name
Change partnership to a sole trade
Created Date
13th October 2015
Product
IRIS Personal Tax
Problem
How does IRIS deal with a partnership that has changed to a sole trade?
Resolution
Users are required to enter a ‘To’ date for the partner/s who left the partnership. This can be entered by going into Client | View | Related | Involvements. The followings are expected: Scenario 1: Partnership changes to a sole trade during accounting period and tax year Business Tax: -Prints a partnership return with an end date automatically entered in box 3.8 for the period in which the partner leaves. -Treats the business as a sole trade for any future periods. Personal Tax: -Prints partnership pages for all partners for this tax year -Prints self employment pages for future periods. -Personal Tax Computation will show the income as Partnership in the year that changed from Partnership to Sole Trade, in future years it will show as Self-Employment Scenario 2: Partnership changes to a sole trade after the accounting period ends but within the tax year Business Tax: -Generates two sets of partnership return pages: -One for the accounting period which ends during the tax year -One for the accounting period which ends during the next tax year Both sets of pages will contain: -Figures on the trading and professional income pages -A date of cessation in box 3.8 -A date of cessation against the departing partner. Partnership pages will not be generated in the following tax year as they have already been returned in the preceding period. Personal Tax: -Generates partnership pages for all partners for this tax year and the following tax year. -For periods after that, Personal Tax will generate self employment pages. -Within the Computation it will show the income as Partnership in the year that it changed from a Partnership to a Sole Trade and in future years it will show as Self-Employment

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