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Convert a Partnership to Sole Trade when Integrated in Personal Tax

You will need 12 months accounts for the Partnership.
important
  • Do not enter a cessation date.
  • Do not change the accounting date where a self-employment becomes a partnership or vice-versa part way through the year.
  • Enter the leaving date of the partner who is not continuing in the business. (This will trigger any overlap in the 'leaving' partner's return.)
  • Conversions should have effect from the first day of an accounting period.
note
A conversion starting at the beginning of an accounting period may mean that you have a partnership with only one partner for part of a year. If this is the case, your client will only have partnership pages in the year of conversion (despite the fact that they were self employed for part of the period). This is correct and in line with HMRC guidance. You should almost never have both partnership and self-employment pages for the same business in a single return.
  1. Enter the leaving dates for any partners who are leaving in Digita Contact Manager.
  2. In Practice Management, create a new sole trade.
    important
    Do not enter a commencement date.
  3. Link the continuing partner to the new sole trade.
  4. Open the Partnership in Personal, Business and Trust Tax.
  5. Select
    Apply changes
     from Digita Contact Manager.
  6. Select
    Edit,
     then
    Schedule Editor
    .
  7. Select
    Change
    .
  8. Enter the date of conversion to a Sole Trade.
    note
    This should be the first day of the accounting period after the period in which the change occurred, not the actual date that the partners left.
  9. Select
    OK
    .
  10. Select
    Close
    .
note
  • Personal, Business and Trust Tax will:
    • Enter the end date of the last partnership accounts which it picks up from the data already entered.
    • Enter the end date of the first sole trader accounts, which can be amended if necessary.
  • When you use the convert function, Personal, Business and Trust Tax will carry forward overlap to the self-employment for the 'continuing' partner.

This article applies to:

  • PRODUCT: Digita Personal Business and Trust Tax