Jenni Marshall

Thank you for your response, however it does not provide the information required. It would be appreciated if you could provide guidance specifically relating to basis period reform and the treatment of transition profits spread over 5 years if a sole trader forms a partnership. Can the profits continue to be spread over the 5 years?

When a sole trader takes on a partner and a partnership is formed it is treated as a continuation of trade for tax purposes. If the sole trader has transition profits brought forward that have been spread over 5 years, is the change from sole trader to partnership treated as a continuation of trade and the profit spreading continues or is it treated as a cessation of the sole trader business and the remaining profits chargeable at the date of the partner being added?