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The Partners - Taxable profit allocation template takes the overall taxable profit figure calculated for the partnership and splits it between the individual partners, along with rental income, other trade income, interest, dividend and wayleave income where relevant, so each partner's own tax position shows the correct share.

Table of contents 

When should I use this template?

Use it for unincorporated trading partnerships, once the entity-level taxable profit figure has been calculated in the Taxable Profit template. It is not relevant for sole traders (there is only one person to allocate profit to) or for companies and LLPs, which do not go through this partnership tax-return-style split.

Before you start

  • Complete the Taxable Profit template first. This template pulls its overall taxable profit figure from there, and shows a caution message, blocking meaningful use, until that template exists and is unhidden (it does not need to be starred).
  • Set up the partner list and choose a profit-split method (%, Equally split, Value, Mapped or Varying profit split) on the Partners template first. This template automatically reuses whichever method and percentages/values were chosen there, rather than asking again.
  • If rental property, other trade, interest, dividend or wayleave income have been categorised as disallowed anywhere in the accounts, check those account templates too. Those totals feed the extra allocation tables here.

Background: what it's for

When a partnership completes its UK tax return, each partner needs to know their own share of taxable profit, not just the partnership's overall accounting profit. HMRC's partnership return also expects some income types, namely rental profit, interest, dividends, wayleave payments and "other trade" income, to be identified and allocated separately from ordinary trading profit, because they are taxed under different rules. This template takes each of those figures and splits it between the partners on the same basis as their share of accounting profit, with the option to fine-tune each partner's salary, interest on capital, other prior shares and percentage or value share independently for each type of income if needed.

Steps

  1. Check the caution message at the top of the template. If it says the Taxable Profit template must be added and completed, do that first.
  2. Review the Profit allocation table. This is always shown, and splits the overall taxable profit figure using the split method chosen on the Partners template. Each partner's default salary, interest on capital, other prior shares and percentage/value share are pulled through automatically; you can overwrite any of them here without affecting the Partners template.
  3. If any partner's resulting share is negative, for example where that partner's salary and interest exceed their share of the profit, a Reallocate losses column appears automatically so that loss can be pushed onto the other partners. The template checks that the total reallocated across all partners is nil.
  4. Where Mapped is used on the Partners template, this template picks up the same account mapping for salary, interest on capital and other prior shares, and derives each partner's share directly from the mapped accounts rather than asking for a percentage or value.
  5. Review the additional tables further down: Rental income, Other trade, Interest income, Dividend income and Wayleave income. Each only appears if there is a non-zero balance in the corresponding disallowed income/expenses category anywhere in the accounts. Rental income and Other trade show the income and expense elements before splitting the net result between partners in the same way as the Profit allocation table; Interest, Dividend and Wayleave are allocated straight from a single total using each partner's percentage or value share (they have no salary/interest/other prior shares element).
  6. Use Other adjustments / rounding for any final manual tweak needed per partner, and check the unreconciled indicator at the foot of each table. It flags if the subtotal does not agree with the profit or loss figure it should total to.
  7. Add any supporting notes or attachments in the optional comments area under each category, if needed.

What flows through to the rest of the accounts/workflow?

  • Nothing else in the working papers reads this template's results back. It is the final step that converts the partnership's overall taxable profit (and rental/other trade/interest/dividend/wayleave income) into each partner's individual share.
  • The template links back to both the Taxable Profit template and the Partners template so you can trace where each figure came from.

What rolls forward next year?

Nothing rolls forward automatically inside this template. The profit-split method, percentages and category totals are re-derived each year from that year's Taxable Profit and Partners templates. Per-partner override inputs (salary, interest, other prior shares, percentage, value, reallocated losses, other adjustments) are not carried forward, so re-enter them if they still apply.

Where the data comes from

  • Taxable Profit template: supplies the overall taxable profit or loss figure allocated in the Profit allocation table.
  • Partners template: supplies the partner list, dates, profit-split method, and each partner's percentage, value, salary, interest on capital and other prior shares.
  • Disallowed income/expenses categorisation on account templates: supplies the rental property, other trade, interest, dividend and wayleave income/expense totals used in the additional tables.
  • Partner current accounts mapping (used only when Mapped is selected on the Partners template): supplies the account ranges used to derive each partner's share directly from posted figures.

Frequently asked questions

Why can't I select a profit-split method on this template?

The method (%, Equally split, Value, Mapped or Varying profit split) is chosen once, on the Partners template, and reused here automatically so the split stays consistent across all the partner working papers.

Why has a "Reallocate losses" column appeared for one of my tables?

It appears automatically whenever a partner's calculated subtotal share for that category is negative. Use it to move that loss onto the other partners; the template checks that the total reallocated across all partners nets to zero.

Why don't the Interest, Dividend and Wayleave income tables show Salary, Interest on capital or Other prior shares columns?

Those appropriations only apply to trading profit. Interest, dividend and wayleave income are allocated straight to partners using their percentage or value share.

Why is the Rental income / Other trade table not showing at all?

Those tables only appear when there is a non-zero balance in the corresponding disallowed income/expenses category somewhere in the accounts. If there is nothing to allocate, they do not appear.