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Nazim and Laura have been in partnership for many years, preparing accounts to 31 Oct and sharing profits equally. On 1 june 2019 Fabiola joind the partnership and agreed praofit sharing ratio was 2:2:1 to Nazim, Laura and Fabiola. Adjusted trading profits for year ended 31 Oct 2019 is 240.000 and for 2020 300.000. The question is to choose correct statement. The correct answer is that Fabiola will be assessed on trading income of 45.000 in 2019/20, she will be assessed on trading income in 20/21 of 60.000 and she will have overlap profits of 25.000. Regarding this solution I understand that for Fabiola first POA is Jun 2019 till 31 Oct 2019 so it does not fall into second tax year and the basis period for second tax year should be from 5th April 2020 till 5th April 2021 (at least this is how I understood the lecture on basis period) but the solution is not like that,in the solution second tax year should be assessed on CYB 31 Oct 2019 till 31 Oct 20 which gives solution of 60.000.
Could you know help me to undertand this question?
Thank you.
Ana
