Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Partnership problem

05 May 2009
Issue: 4204 / Categories: Forum & Feedback , Capital Gains , Income Tax
The members of a professional partnership incur some business expenses individually in addition to the communal expenses paid by the partnership. How is tax relief claimed?

Although I have dealt with some partnerships previously I have just encountered a problem that I have not met before and should be grateful for readers’ advice.

I am dealing with a professional partnership. All of the normal ‘communal’ expenses are paid from the partnership bank account.

However the partners appear to have agreed that their ‘personal’ partnership expenses are paid for out of their own pockets. For example some of the partners’ spouses carry out secretarial duties for them when they are working from their homes.

Furthermore to avoid arguments about what cars they use the costs of these are paid personally to avoid say two of the partners paying for the third’s luxury car.

My confusion is how I account for these expenses. The partners do not want them shown in the partnership accounts as the profits are split evenly between them...

If you or your firm subscribes to Taxation.co.uk, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.

back to top icon