Sole Trader to Partnership

[accsvalue]

Sole trader has traded for several years. He now wishes to continue trading but to form partnership with his wife. Does he need to fill in a form to register the change in status or can he just split the partnership profits on Form 11?

Thanks

 

[Joe_90]

New vat number / employers reg no and partnership no.

A partnership has to file its accounts details on a form 1 not a form 11. There is also a cessation of the old trade and a commencement of the new one (except farming) so 31 December might be a good date to use.

 

[WizardDr]

@accsvalue

Cant see the advantage of a Partnership - company structure would be different.

Whats the purpose?

 

[kennyb3]

@accsvalue

Cant see the advantage of a Partnership - company structure would be different.

Whats the purpose?

Increasing the standard rate band is one possibility? (assuming they are in that in between area)

 

[WizardDr]

@kennyb3 - but how would that work with a Partnership, would Revenue allow it?

 

[Joe_90]

You will see a lot of examples of sole traders employing their spouse to increase the standard rate band but the employee spouse does not pay PRSI toward their own pension.

This can cause an issue when they have assets in their own right they will not meet the means test for the dependant spouse increase.

Where 2 partners have income then they will qualify for the increased exemption.