Form11 (E) - I dont get it!

Swish

Hi all. I wonder if anybody could help me with my comprehension of Form11(E)'s. I am helping a friend to file his taxes but i just dont get the Form11.

My friend has a Limited Company which did not employ him, hence, he has no P60. His CT1 is ok and i can undertand most of this i.e. the company pays corporation tax on profits, but the bit i dont get is the Form11.

Revenue says he has to submit all other incomes on the Form11 (or Form11E using the appropriate panels). Following the notes accompanying the form, it says to enter extracts from the accounts. If i do this, including adding all other relevant details, and calculate it, i get a liability. Is this not paying tax on the same income twice?

Sue

misspiggy40

I would assume they mean any income he had personally. You would not enter the Ltd Co accounts on this as it is an entity in its own right which you have accounted for in the CT return. Things like bank interest, rental income, dividends and so on is what I guess they are looking for. If he does not carry on another trade as a sole trader they are not looking for accounts.

Swish

Thanks for your prompt reply misspiggy.

He has a limited Company and is also a partner in another buiness and has rental income. So when i am doing the form11 i ignore his Limited Company income as this has tax already paid on it Y?
The Partnerhip profit has been calculated so i know the amount he is liable for in this.
So where do i enter his other income? Do i just put in the taxable income from his partnership and rental income where it says 'Other Income' on the Form11? Do i ignore 'Extracts from Accounts'?

Below is an extract from the help file for the Form11
Remember:
You must prepare business accounts but you should not submit them with your 2008 Return. Instead, you are required to complete Extracts From Accounts on pages 4-6 of the Return.

acc grinds

This is from the Form 11 -
Extracts From Accounts, pages 6 and 7, must be completed in all cases where you or your spouse are in
receipt of trading or professional income, except where either Lines 121 or 122 apply.

122. Where the income arises from a partnership, enter the tax reference of the partnership.


Rental Income has a separate section on the return - Its Section C on the hard copy of the return.

dbran

Dont you also have to submit Form 1 (partnership) somewhere:D

Regards

dbran

Swish

So if I enter the partnership no in line 122 then i dont have to enter extracts from the accounts? Let me try to simplify what i am trying to do:

There is a partnership (50/50) i.e. John & Mary. I file a 'firms1' for the partnership and then file a form11 for Mary using 50% the trading details from the partnership plus any other income if she had any. Is this correct?

John, also has a Limited Company and Rental Income. I file a CT1 for the Company and a Form11 for John, to show his rental income, in the appropriate place on the form and just enter the partnership No in line 122? No extracts from the partnership accounts or the limited company?

Swish

I have read the notes to Form11(E) 2008 (All 70 pages) I know im not stupid but i still dont get it. I can see where i put in the partnership no and i dont need to fill in 'Account Extracts'. I can see where to enter the rental details, but it also says in the notes that this is not a computation, just extracts. So how can i do his personal tax computation and how would it know his income earned from the partnership if i dont need to enter the 'account extracts'. Could somebody please stop me from going mad and explain this for me.

Legend100

k il try and help you out with your queries

first of all, Fill in the following in the Form 11E

under B on the form
101. Tick the box self
102. Describe trade
104(a) enter tax adjusted profit in the partnership (have you done this comp or has the other partner prepared it by the way?)
105(a) enter the assessable profit. This is your friend's share of the tax adjusted partnership profit (eg 50% of a 10 k profit, enter 5 k here)
119. first day of accounts period
120. last day of accounts period
122. the partnership number (do not fill in the accounts extract below this)

Under C
202. Tick the box if rental property is registered with prtb
203. number of rented properties
205. Gross rent receivable (this is what he receives every month)
206. Expenses - specifically repairs, interest on the mortgage and any other qualifying expenses
207. Gross rent less expenses (205 minus 206)
208. Capital allowances claim (if any)

under D
Since he is not taking a wage from the comany, you do not need to fill any details other than
228. Directorships - company no and % shareholding

By completeing this much of the form, you will have declared his partnership income, rental income and scehdule e income (none). If there are other income sources let me kno

You then need to complete the Form1 firms to declare the accounts extract for the partnership. Only one of these needs to be done so check if the other partner has prepared it already.

You were correct in your treatment of the company tax and declaring it through the CT1

Swish

Thank you so much Legend100. That was so helpful. If i could just ask one more question, On Line 104(1) is the amount here the adjusted profit for the partnerhip i.e. the 10,000 and Line 105(a) the adjusted profit for the partner i.e. the 5000

Legend100

yeah i think so, that is what i usually put in and the revenue have never come back

If someone else knows the definitive answer, i am open to correction.

You could always ring revenue to find out

Swish

Cheers for all that. I will ring revenue on that last bit.

Sue

TaxingTimes

Just for your information -

Where the Revenue ask for "extracts from accounts" - these figures are not used to calculate tax, but just to collect information.

You do have to complete these, but ignore them for tax purposes - the taxable profit is the only figure included in the tax computation.

Swish

Hi TaxingTimes - If I enter the extracts for accounts for the partnerhip and the adjusted profit at line 104(a) and leave 105(a) with 0, then it will not be included in the tax computation, and thsi is correct becaue it has already been accounted for in the Firms1. Would that be correct? Im testing this out in ROS Offline. - Sue

Legend100

you do NOT fill in the extract for the accounts on the form 11E when declaring partnership income, it only goes in the Form 1 Firms, you just put in the assessable profit on the form 11e

When you put in the partnership number on the Form 11E, the revenue system will match it against the Form 1 Firms

Oh and the 105(a) is not zero if you made a tax adjusted profit in the partnership. This is the most important figure on your return as it is the your share of the actual amount of profit the revenue assess for your tax liabilitY

the form 1 firms is only there as a mechanism to highlight the extract of the partnership accounts. it doesn't have any bearing on your tax liability.

Swish

So I think i have it backways then.
The Firms1 is filled in for the Partnership with account details but it doesnt do a calculation. It is just for Revenue's records to link to the partners Y?
The Form11/11E is filled in for both partners but the extracts from the accounts are not, just the partnership no, which revenue uses to link the details Y?
The amount of adjusted profit, calculated from the partnership accounts, is entered in the 'Asessable Profit', to be used in the tax computation Y?
Could I be right this time

Legend100

yeah that is exactly except that is is the 50% of the share of the profits (assuming 50:50 split) that goes into assessable profits in each partner's form 11

just make sure you only put your share of the adjusted profit in line 105!!! otherwise you'll be taxed on the lot