Taxes Management Act 1970

[F1 12ABZB Partnership return conclusive as to partnership shares U.K.

(1) A partnership return is conclusive for tax purposes as to—

(a) whether a person does or does not have a share in the profits or losses of the partnership for any period, and

(b) what the share of any person in those profits or losses is.

(2) That applies even where the person would not otherwise be chargeable to tax on profits of the partnership.

(3) If there is a dispute between the person mentioned in subsection (1)(a) or (b) and any one or more partners in the partnership about whether what is given in a partnership return is correct as to the matters mentioned in that subsection, a party to the dispute may refer it to the tribunal for determination.

(4) That does not include a dispute to the extent that it is in substance about the amount (before sharing) of the partnership's profits or losses for a period.

(5) A referral under subsection (3) must be made before the end of the period of 12 months beginning with the day after—

(a) the day on which the partnership return was delivered, or

(b) if the dispute relates to an amendment to the return made under section 12ABA (amendment of partnership return by taxpayer), the day on which the amendment was made.

(6) Where a dispute is referred to the tribunal under subsection (3)—

(a) the party referring it must at the same time give notice of the referral to—

(i) HMRC, and

(ii) the reporting partner, and

(b) the reporting partner must give notice of the referral to—

(i) every other partner in the partnership, and

(ii) any other person appearing to the reporting partner to be a party to the dispute.

But notice need not be given under this subsection to anyone who referred the dispute.

(7) Where the tribunal determines that what is given in the partnership return as to the matters referred to in subsection (1)(a) or (b) is not correct—

(a) the tribunal must determine what the return should have given, and

(b) HMRC must amend the return accordingly.

(8) Where a partnership return is amended under subsection (7)(b), HMRC must by notice to any party to the proceedings or any partner in the partnership amend—

(a) their return under section 8 or 8A of this Act, or

(b) their company tax return,

if the amendments are necessary to give effect to the consequences of the amendment of the partnership return.

(9) Where at any time after a referral is made under subsection (3) but before the tribunal determines the dispute the reporting partner gives notice to HMRC that all the partners in the partnership (whether or not party to the proceedings) have agreed in writing that the partnership return—

(a) is correct without variation, or

(b) requires correcting in a particular manner,

the like consequences shall ensue for all purposes as would have ensued if, at the time the agreement was made, the tribunal had determined the dispute in accordance with the terms of the agreement.

(10) Subsection (9) does not apply if—

(a) within the period of 30 days beginning with the date of the agreement, a party to the agreement gives notice to the other parties to the agreement that the party wishes to repudiate or resile from the agreement, or

(b) within the period of 30 days beginning with the date on which it receives notice of the agreement, HMRC gives notice to the reporting partner of its objection to the agreement.

(11) A partnership return which has been the subject of a referral under subsection (3) may not be the subject of another referral under that subsection, unless that other referral—

(a) relates to a dispute arising in consequence of an amendment of the partnership return under section 12ABA (amendment of partnership return by taxpayer), and

(b) is the first referral following the amendment.

(12) In this section—

• “reporting partner” means the partner who made and delivered the partnership return or that partner's successor;

• references to a partner in a partnership are to a person who was a partner in it at any time during the period in respect of which the partnership return was made.]

Textual Amendments

F1 S. 12ABZB inserted (with effect in accordance with Sch. 6 para. 14 of the amending Act) by Finance Act 2018 (c. 3), Sch. 6 para. 10(2)

Modifications etc. (not altering text)

C1 Pt. 2 applied (with modifications) (6.4.2024 immediately after the coming into force of 2023 c. 57, Sch. para. 4(1)(2)) by 1992 c. 7, s. 11A (as inserted by The Social Security (Class 2 National Insurance Contributions) (Consequential Amendments and Savings) Regulations 2024 (S.I. 2024/377), regs. 1(2), 10 (with reg. 1(4)))

C2 Pt. 2 applied (with modifications) (6.4.2024 immediately after the coming into force of 2023 c. 57, Sch. para. 4(1)(2)) by 1992 c. 4, s. 11A (as inserted by The Social Security (Class 2 National Insurance Contributions) (Consequential Amendments and Savings) Regulations 2024 (S.I. 2024/377), regs. 1(2), 9 (with reg. 1(4)))