If you are a partner who has claimed the SEISS grants because the coronavirus pandemic has adversely affected the partnership’s business, depending whether or not the SEISS grants are retained by the partner or distributed to the actual partnership, then different rules may apply.
Partner retaining SEISS payments – If a partner has received SEISS payments in 2020/21 and retains all payments, then the partner will be taxed on all the SEISS payments received in 2020/21 and also on their total share of the partnership’s profits.
Partner transfers the SEISS payments to the partnership - Where the SEISS grants are distributed to the partnership and not retained by the partner, the grant becomes part of the partnership trading income which is taxed according to the profit-sharing arrangements in the basis period ending in the tax year – therefore the grants are not assessed in the tax year in which received.
Please note that this post is generic in nature therefore always seek specific professional advice. Farrell & Farrell do not accept any liability for any direct or indirect loss arising from reliance placed herein.
Comments