Thinly spread?

NEVER TELL CLIENTS that something in tax is going to be straightforward especially before the legislation has been published. 'The hard part' I told my clients 'will be computing the adjustment under UITF 40. There will then be some simple rules to allow you to spread the tax cost over three to six years'. This was in March when an outline of the spreading rules was available but the Finance Bill had not yet been published.
A little background is needed here and unless otherwise indicated statutory references are to FA 2006 Sch 15. Perhaps an example is the best way of illustrating the rules.
Giles and Panesar were in partnership as public relations consultants. Giles was the senior partner receiving 60% of the profit but he retired at the end of the accounts year to 31 December 2005. Panesar...