Taxes Management Act 1970 section 12ABZB

Partnership return conclusive as to partnership shares

Section 12ABZB establishes that the partnership return is the definitive record of each partner's share in partnership profits or losses, and sets out the process for resolving disputes about those shares.

• The partnership return is conclusive for tax purposes as to whether a person has a share in partnership profits or losses, and what that share is — even if the person would not otherwise be chargeable to tax on those profits.
• Any party to a dispute about the correctness of the return regarding profit or loss shares may refer the matter to a tribunal within 12 months, but disputes about the total amount of profits or losses before sharing are excluded.
• When a referral is made, notice must be given to HMRC and the reporting partner, who must in turn notify all other partners; if the tribunal finds the return incorrect, HMRC must amend it and make consequential changes to affected individual or company tax returns.
• If all partners agree in writing that the return is correct or needs correcting in a particular way, that agreement takes effect as though the tribunal had so determined — unless a party repudiates the agreement or HMRC objects within 30 days.