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Claim forms, premises and retirement

ASK THE EXPERTS

NHS RULES

Where do we stand regarding requests from insurance companies to complete insurance forms for holidays that have been cancelled due to the sudden unexpected death of a patient of ours, when the people travelling (and therefore claiming) were not patients of ours?

The form only refers to the patient, not the claimant, and carries all sorts of irrelevant questions; the insurance company says it cannot send me a letter from the patient's next of kin.

Ask the patient's next of kin for permission in writing to divulge the information, write N/A on most of the questions on the form, and simply state somewhere on the form, 'This patient died suddenly and unexpectedly on X date', sign it, stamp it and release it when you have the fee paid by the claimant.

Dr Tim Kimber

ACCOUNTING

We are a five-GP practice, operating from a notional-rent purpose-built (1986) premises. Three of the partners own the building in a 50/25/25 percentage share, and receive notional rent in proportion. We have outgrown the current building and plan to extend with the partners bearing the capital cost, supported by an increased notional rent payment.

It is intended that the three partners who own the current building, and one other partner, will eventually own the whole of the 'new' extended building in equal 25 per cent shares. This raises issues of asset valuation and protection for the existing arrangement.

For example: value of current building £400,000 cost of extension and alteration works £300,000; value of 'new' building, perhaps £600,000; shares value: four times £150,000.

As the current 50 per cent owner I could potentially face a significant loss. So what would be the most equitable way of deciding how to proceed financially in principle, to protect the interests of all four partners in such a project?

The simplest route to take, since it is the intention that there should be four equal owners of the surgery premises, is to establish that situation before any extension and alteration works are started so that each partner has a quarter share in the existing building (£100,000) and of the cost of the works (£75,000).

This puts all partners in the same situation with a deficiency of £25,000 compared with the original value plus the cost of improvement.

You do not mention anything about the prospect of retirement.

If this event were likely to occur before the total value of the building reached your example of £700,000, you would need to decide what interim arrangement you might be able to formulate.

In the event that notional rent received was in excess of the financing cost, it would be possible to agree that the value of the surgery could be taken as £700,000 irrespective of its current market value.

But once market value had reached £700,000 then such a safety net factor would be removed and all property owners would, thereafter, take the risk of rising or falling property values.

Be warned that such an agreement between current owners may not be acceptable to prospective purchasers and, if the practice was subject to great change, there could be problems.

Stuart Williamson

SUPERANNUATION

I need guidance on the new calculations for pensionable profits for GPs' superannuation contributions for 2004/5 when a partner is retiring.

I am looking at where a partner retires at the end of November 2004 from a practice with a 30 June 2005 year end.

Presumably box 13 of the form, which asks for taxable profits from box 4.22 of the partnership pages of the individual's tax return is incorrect?

Or do we include taxable profit after tax overlap relief has been deducted, and then also deduct pensions overlap relief as well?

In addition, as the partner is retiring during 2004/5, do I need to calculate the pensionable profits first on a continuation basis in order to calculate my overlap relief?

NHS RULES

Once I have calculated pension overlap relief and adjusted the figure in box 13, are the figures that I add back for non-NHS income and non-NHS expenses those for both 2004 and 2005? If not, which financial year should be used?

Also, which figures should be included in box 14 'GP Employer contributions deducted before arriving at taxable profits'? Would this be for both financial periods or for some other period?

Finally, box 20 is included in the calculation to reduce the profit figure to a net figure after reimbursement for employer's superannuation contributions have been deducted.

This calculation divides box 20 by 'Y' which should represent the number of months of reimbursement for employer's superannuation contributions that have been included within the profits so far calculated to box 20 multiplied by 1.1667.

What would the multiple of 1.1667 be in my above example?

For retirement in November 2004, the pension certificate needs to include details for the year ended 30 June 2004 and the period from 1 July 2004 to 30 November 2004 (similar to your 2004/5 tax return).

Box 13 asks for taxable profits; in your case this will be for the period from 1 July 2003 to 30 November 2004 and this should be before deduction of tax overlap.

First you will need to work out your pension overlap for the year ended 30 June 2004, as this should be calculated on this period only and not to 30 November 2004.

When calculating non-NHS expenses and non-NHS income it may be easier to do two separate calculations for each period (year ended 30 June 2004 and period ended 30 November 2004) and then combine the figures together on the final certificate.

The figure in box 14 'GP employer contributions' should be contributions relating to 1 April 2004 to 30 November 2004 as the certificate covers 1 July 2003 to 30 November 2004.

Therefore the multiple of 1.1167 would be for eight months, so would be 9.333.

Jenny Stone

ASK THE EXPERTS

NHS RULES - Dr Tim Kimber is a Littlehampton GP and a member of West Sussex LMC. Email: tim.kimber@nhs.net

ACCOUNTING - Stuart Williamson is a partner at accountants Williamson West. Email: ww@williamsonwest.com

LEGAL - Lynne Abbess is a partner at solicitors Hempsons. They can offer 10 minutes of free advice only, from 10am-4pm weekdays. Phone: (020) 7839 0278

PREMISES - John Hearle is a chartered surveyor and chairman of Aitchison Raffety. Email: john.hearle@argroup.co.uk or fax: (01727) 844472

PLEASE NOTE

Please ask for 'GP Ask the Experts'. You may be asked to book a full consultation if your request is time-consuming or difficult. Our specialists retain the right to refuse advice. The information in the Ask the Experts list is for information purposes only. The expert advice is intended to provide general guidance only. It should not be relied upon by readers, who should seek further professional advice. No legal responsibility can be accepted by GP for the experts' answers.

ASK THE EXPERTS

PENSIONS AND PERSONAL FINANCE - Kevin Quinn is a financial planner at Ramsay Brown & Partners. Email: kevin@ramsaybrown.co.uk

PMS - Dr Mo Dewji is a Milton Keynes GP and clinical director for primary care contracting. Email: mo.dewji@dh.gsi.gov.uk

ACCOUNTANCY AND TAXATION - Jenny Stone is a partner at Ramsay Brown & Partners. Email: jenny@ramsaybrown.co.uk or call (020) 8370 7746 9am-5.30pm weekdays

PRACTICE-BASED COMMISSIONING - Maggie Marum is a management consultant for the NAPC and runs its practice-based commissioning helpline. Call: 020 7636 8626. www.napc.co.uk.

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