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This guidance note sets out the income and corporation tax implications of a partner joining a partnership.

Following the abolition of basis periods from 2024/25 for sole traders and partners in partnerships, meaning that profits and losses are assessed on a tax year basis from 2024/25 onwards, the ‘notional trade’ and opening year rules for trading and untaxed income in this guidance note are only applicable for a partner joining the partnership in the tax years up to 2022/23. There is a specific calculation of the basis period for the transitional year of 2023/24 which is set out in the Basis period transitional rules 2023/24 guidance note. For partners that join the partnership in 2023/24 the basis period for 2023/24 starts on the date of their joining and ends on 5 April 2024.

For the position when a partner leaves the partnership, see the Retirement of a partner guidance note. A partner joining or leaving a firm can have an effect on the capital allowances or capital gains