BIM73190 - Farmers' averaging: SA transitional rules

The changes brought in by SA mean that, for partnerships which commenced trading before 6 April 1994, averaging claims including the year 1996-97 are subject to different rules depending on whether that year is being averaged with the preceding year or the following year. Where successive averaging claims in respect of partnership profits are made, first for 1995-96 and 1996-97, then for 1996-97 and 1997-98:

• the first claim must be made jointly by and is in respect of the profits of the partnership as a whole,
• the second claim is made separately by each individual partner and is only in respect of the claimant's share of the partnership profits - including, for 1996-97, the claimant's share of the averaged profits.

(Also see BIM73125.)