BIM73185 - Farmers' averaging: partnerships: the new rules

ICTA88/S96 (6) as amended by FA94/S216 (3)(A)

Claims to average partnership profits for 1996-97 and 1997-98 or a later pair of years, and for 1995-96 and 1996-97 where the partnership commenced trading on or after 6 April 1994, are governed by ICTA88/S96 (6) as amended by FA94/S216 (3)(a).

The claim is made by the individual in respect of his or her share of partnership profits, and regardless of whether the other partners also claim. The partnership profits should therefore be allocated to the individual partners before averaging takes place.

A partnership change does not affect the availability of relief to any individual who was carrying on the trade both before and after the change (except for a partnership change in 1996-97 where no continuation election is made and the `old' partnership commenced trading before 6 April 1994).