Section 12AD | Amendment of partnership return by taxpayer, or referral of dispute, during enquiry

(1)This section applies if a partnership return is amended under section 12ABA of this Act (amendment of partnership return by taxpayer), or a dispute about the return is referred to the tribunal under section 12ABZB(3) of this Act, at a time when an enquiry into the return is in progress in relation to any matter to which the amendment or dispute relates or which is affected by the amendment or dispute.

(2)The amendment or dispute does not restrict the scope of the enquiry but may be taken into account (together with any matters arising) in the enquiry.

(3)So far as the amendment affects any amount stated in the partnership statement included in the return, it does not take effect while the enquiry is in progress in relation to any matter to which the amendment relates or which is affected by the amendment and—

(a)if the officer states in a partial or final closure notice that he has taken the amendment into account and that—

(i)the amendment has been taken into account in formulating the amendments contained in the notice, or

(ii)his conclusion is that the amendment is incorrect,

the amendment shall not take effect;

(b)otherwise, the amendment takes effect when a partial closure notice is issued in relation to the matters to which the amendment relates or which are affected by the amendment or, if no such notice is issued, a final closure notice is issued.

(4)Where the effect of an amendment is deferred under subsection (3) above—

(a)no amendment to give effect to that amendment (“the deferred amendment”) shall be made under section 12ABA(3) of this Act (consequential amendment of partners’ returns) while the enquiry is in progress in relation to any matter to which the amendment relates or which is affected by the amendment;

(b)if the deferred amendment does not take effect but is taken into account as mentioned in subsection (3)(a)(i) above, section 28B(4) of this Act (amendment of partners’ returns consequential on amendment of partnership return by closure notice) applies accordingly; and

(c)if the deferred amendment takes effect under subsection (3)(b) above, any necessary amendment under section 12ABA(3) of this Act may then be made.

(5)For the purposes of this section the period during which an enquiry is in progress in relation to any matter is the whole of the period—

(a)beginning with the day on which notice of enquiry is given, and

(b)ending with the day on which a partial closure notice is issued in relation to the matter or, if no such notice is issued, a final closure notice is issued.