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Bill and Ben were Gardeners in a Partnership, Bill owned 75% of the business and profits...

  1. Bill and Ben were Gardeners in a Partnership, Bill owned 75% of the business and profits and Ben 25% of the business and profits. They commenced trading on 1 October 2012 and prepared Accounts to 30 September 2013. Ben ceased trading on 31 December 2016 and Bob took over Ben’s 25% share in the business for profits on 1 January 2017.

His adjusted profits were as follows:

Year Ended 31/09/2013                                              £54,000
Year Ended 31/09/2014                                              £42,250
Period from 01/10/2014 to 31/03/2015                       £21,000
Year Ended 31/03/2016                                              £74,350
Period from 01/04/2016 to 31/12/2016                       £60,000

Year ended 31 December 2017                                  £54,000

Year Ended 31/12/2018                                              £62,500

  1. Calculate the Taxable profits for the tax years 2012/13 to 2018/19, including overlap profits for Bill, Ben and Bob individually. Ben ceased trading on 31 December 2016 and Bob took over Ben’s 25% share in the business for profits on 1 January 2017.

(10 Marks)

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Answer #1

Solution Ben were in a Bill and Partnership- from s Bill 75% % share in profil Y Ben 25% Y - 31 Dec 2016 75% over Bens 25%Ycarended 2014_ie: 311092014 Partner Partner - Bill < Ben Adjusted Profits = € 42,250 190 Bill (757) (251) £42,250 X 75 £31.6Period from. 01042015 - 30/09/2015 ( 6 months ago {74350 - this profit is for ox|04|2015 - 31 (3) 2016. so we have to calculavewed from 01/04/2016 - 31|09|2016. •C6 monte) We have adjusted profit for the period 01/04/2016 to 31/12/2016 og month £60,0Period from (January 2017) Olloi 2012 - 31109/2017 C 9 months) rofet for olo1/2017 - 31/12/2017 - 12 month - E54000 x 9 24050Period from 01/01/2018 - 31/09/2018. Profit for this period 2 62500 x9 = 46075 12 Bill (757) Bob (25.4) 46875X75 - 35,156.25Calculation of Taxable profit Including overlap :-D- x- 2012-13 to 2010-19) Bill Ben 13,500.00 31,687 -50 10,912.50 Year end

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