The form should be filled in and submitted by the nominated person in the partnership which will be a partner in the other partnership. And yes, we understand if you need to read that sentence a few times! Remember to include the registration number on the form if the new partner is a limited liability partnership or limited company.
Can a limited company be a partner in a partnership?
Yes, a limited company can be a partner in a partnership. The company may earn income from its portion of the partnership, and will need to include this when calculating the company’s profits on its Company Tax Return.
Tax returns and partnerships
In a partnership:
Each individual (human!) partner is responsible for their own Self Assessment tax return, and paying their income tax and National Insurance contributions.
Each partner that is another entity (like a limited company or another partnership) must submit its own tax return which includes its share of any profits from the partnership.
The partnership itself must submit a tax return in its own right, and the nominated partner is responsible for this.
The main partnership tax return must also detail the share of profits or losses for each partner, using the partnership statement. A copy of the partnership statement should be made available to each partner so they can complete their own tax return.
What if I leave a partnership, or the partnership ends?
A partner who leaves a partnership still needs to submit a tax return for that year, up until the date they left. If the partnership itself ends, the tax return is completed for the period of trading up until the date the partnership ended.
Record keeping in business partnerships
You must retain partnership records for five years following the 31st January deadline of the partnership tax return. This also applies if you complete a paper tax return.
The records which you must keep depend on the type of gains and income the partnership receives. Unfortunately, failure to maintain the correct business records could result in a penalty or fine, so always double check!