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Paragraph 23 Schedule 12 Finance Act 2000

A partnership (or, if the intermediary is an individual, that individual) can choose to have its taxable profits calculated as if it had ceased and recommenced trading on 6 April 2000. It may be beneficial for it to do this in order to avoid a substantially increased liability for the first tax year in which the new rules apply. »Ê¹ÚÌåÓýapp tax and secondary NICs on the deemed payment would have been due on 5 April 2001, but relief against the profits of the partnership might not be given until the following tax year, depending on the partnership’s accounting date.

»Ê¹ÚÌåÓýapp election for the deemed cessation must be made in the 2000/2001 Partnership Return (or if the intermediary is an individual in the individual’s 2000/2001 Return). This has to be submitted within the normal time limit.

Notwithstanding any deemed cessation, a partner’s share of the losses from the pre 6 April 2000 business may be carried forward against his/her share of the subsequent profits of the post 6 April 2000 business. »Ê¹ÚÌåÓýapp same position applies where the intermediary is an individual.