Q: Glenn, can you tell us something about the advice you recently gave, concerning the changes to a partnership?

A: I had a client who was in a partnership, and they were considering taking on a new partner. The taxation rules when a partnership ceases and a new partnership commences are fairly complex.He met with his new partners and their accountants and a solicitor, and they all proceeded to say “yes, lets do it this way, lets change the partnership on this date and proceed.”

I said why don’t we consider the taxation about this merger, and did some small exercises with them which took an hour or so. But essentially by changing the date of the merger and the type of the partnership they were going to be involved in, it saved them considerable amounts of tax and national insurance, and also deferred the date of payment of their tax, which clearly made everyone happy.

What was interesting was that they already had some senior accountants, solicitors and themselves, and they hadn’t considered this as being an aspect of the whole transmission.