EM7567 | Partnerships: enquiries: concluding an enquiry - completing the enquiry into the partners personal return

TMA70/s.12AC(6)
TMA70/s.28A
FA98/Sch18/Para 34

When notice of intention to enquire is given into a partnership return under s.12AC, it is deemed (by s.12AC(6)) to include the giving of a notice of intention to enquire into the partners personal return under s.9A (for individuals) or Para 24 Sch18 FA98 (for companies).

The enquiry which is deemed to be opened into the partners personal returns extends to issues which relate to the partnership only – it does not extend to all entries in the partner’s personal return. If risks are identified in the partners return which are unrelated to the partnership, then you should give a separate notice of enquiry into the partners personal returns under s.9A or Para 24.

If separate notice of enquiry was given to the partners

If you have given a separate notice of enquiry into the partners personal return under s.9A or para 24, you must complete this enquiry separately by issuing a final closure notice to the partner. The guidance at EM3800+ should be followed as appropriate.

If separate notice of enquiry was not given to the partners

If you did not give separate notice of intention to enquire into the partners return, the only enquiry into the partners return will be the one which was deemed to have been given pursuant to s.12AC(6).

In most cases, you will not need to issue a final closure notice in respect of this enquiry. This is because any amendments that you need to make to the partners returns can (and should) be made as a consequential amendment under s.28B(4).

For example – If you identified that the partnership had understated their trading profits in the return, the partnership return would be amended by issuing a final closure notice under s.28B. We would then be required under s.28B(4) to amend each of the partners returns, increasing their share of partnership profits, to give effect to the amendments made to the partnership return. As all required amendments have been made under s.28B(4), we do not need to issue the partner with a final closure notice in respect of the enquiry which is deemed to have been opened into their personal return under s.12AC(6).

In some rare cases, you may need to issue a final closure notice to close the enquiry which is deemed to have been opened into the partners return pursuant to s.12AC(6). This will usually be a case where:

• You have identified a risk related to the partnership which cannot be amended under s.28B(4). For example, a risk involving capital gains in respect of the disposal of a partnership asset, or,

• The customer contacts us (or makes an application to the tribunal) to request a closure notice in respect of this enquiry.

Contact TALA if you consider that you need to issue a final closure notice to close an enquiry which is deemed to have been opened into the partners personal return pursuant to s.12AC(6).