07: New partnerships

There are special rules to determine a partnership’s taxable profits in its first and second tax year. These rules also apply individually to new partners in an existing partnership.

First year The tax assessment is on the profits from the start of trading up to the following 5 April.

Second year tax assessment is normally on the profits of the 12 months to the accounting date in the tax year. However where the accounting date is less than 12 months after commencement, assessment is on the profits of the first 12 months.

Third year tax assessment is on the profits of the 12 months to the accounting date in that year.