EM7523 - Partnerships: SA and partnerships: referral of a dispute

TMA70/S12ABZB

The following guidance applies to returns relating to periods for 2018-19 and onwards.

A partnership tax return is conclusive for tax purposes as to whether a person has a share in the profits or losses of the partnership, and what the persons share of the profits or losses was.

If the person disagrees with the amount allocated to them in the partnership statement, they may refer this dispute to the tribunal.

Any dispute referred to the tribunal can only be in respect of a dispute regarding the persons share of the partnerships profits or losses. A person cannot refer a dispute to the tribunal if the issue is in substance about the amount of the overall amount of the partnerships profits or losses.

For example – A partner may refer a dispute to the tribunal if they consider they received 5% of the partnership profits, but the partnership statement shows they received 10% of the partnership profits. This is a dispute about their profit share.

A partner however could not make a referral to the tribunal if the dispute is in substance about the amount of partnership profits (or losses) before sharing. This could be for example where the partner considers that the partnership has not calculated their profits or deductions correctly.

If the tribunal consider that the amount of profit or losses allocated to the person in the partnership return is wrong, the tribunal will determine what the correct amount should be and HMRC must amend the partnership return as appropriate. Where the partnership return is amended, HMRC must also amend each of the partners returns so as to give effect to the amendments made to the partnership return. We do this by giving notice to the partnership and the partner.

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