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HMRC internal manual

Business Income Manual

Business Income Manual: Computing the amount to assess: Mixed Membership Partnerships: Excess profit allocation: Commencement

Paragraphs 11-13, Schedule 17 FA 2014

The Mixed Membership Partnership legislation applies to periods of account commencing on or after 6 April 2014.

There are special rules which apply where a period of account begins before 6 April 2014 and ends on or after 6 April 2014.

You look at the period from 6 April 2014 to the end of the period of account. If the Mixed Membership Partnership legislation does not apply, then you do not need to take action.

If the Mixed Membership Partnership legislation does apply, then the profits have to be calculated as if there were two notional periods of account, one ending on 5 April 2014 and the second commencing on 6 April 2014.

The notional periods of account are only to be taken into account for the purposes of the mixed membership partnership rules.

The profits should be split between the periods on a just and reasonable basis. In many cases a simple time apportionment will produce a just and reasonable allocation.