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Give partnerships clear guidance, OTS urges government

printer Mail

The Office for Tax Simplification (OTS) has published its final report and recommendations on the taxation of partnerships. The report repeats many of the recommendations made in the interim report published on 22 January 2014.

In addition, the final report includes the following, disparate, further recommendations:

  • the introduction of clear and comprehensive guidance for new partnerships;
  • a checklist of issues that need to be considered in a partnership agreement;
  • a requirement to consider the status of partnerships in future double tax agreement renegotiations;
  • a statement of practice on composite returns;
  • pursue the alignment of tax rules of foreign exchange for partnerships;
  • correct the omission of partners from the legislation on remittances from fixed funds;
  • insert guidance in HMRC’s partnership manual on group relief structures involving LLPs;
  • launch seminars and releases in order to raise awareness of, and update, statement of practice D12 (on CGT and partnerships); and
  • clarification on entrepreneurs’ relief in the partnership manual.

It is likely that the government will respond to the report, outlining which recommendations it will and will not pursue, in due course.