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Steps to take when a GP partner retires

Which organisations do you need to inform when a partner retires? Lynne Abbess and Neha Shah provide a useful checklist.

Practices need to ensure the retiring partner is removed from all aspects of the partnership (Picture: iStock)
Practices need to ensure the retiring partner is removed from all aspects of the partnership (Picture: iStock)

The retirement of a partner throws up a list of actions to be taken to ensure she or he is 'removed' from the ongoing partnership.  

It is important to ensure proper notification is given, which will enable the retiring partner to know their liabilities have been brought to an end and allow the continuing partners to know they are free to run the business without reference to the retired partner.

The checklist below forms a good starting point of those to whom notification is required.  

If a partner is planning on taking 24-hour retirement, see this article for advice.

Planning stages

Inform your accountant and solicitor: Before any steps are taken to formalise a retirement, talk to your accountant and solicitor to consider any circumstances necessitating specific action/timescales in your particular case and any tax implications affecting the retiring partner. If you approach this in the wrong order it may be impossible to rewind the clock.   

NHS Pensions Agency: Retirement from the NHS necessitates notification to the NHS Pensions Agency to enable them to update their records and commence the pension payments. This can take some time (particularly in the case of early retirement on grounds of ill health), so if a partner will require their pension immediately post retirement an early approach is advised.

Partnership deed: If the partnership deed has not been reviewed within the last two years, you should have it updated. This becomes essential if the retirement is simultaneous with the admission of a new partner, in which case the deed will require revising to avoid it becoming invalid.

Property: If the retiring partner is one of the ‘registered proprietors’ a formal transfer of the property will be required (whether or not the property has a value). In the case of a capital value property, this will also necessitate:

  • the agreement of a valuation
  • refinancing by the buyers to enable them to purchase the share
  • the release of the retiring partner from any existing mortgage
  • consideration of Capital Gains Tax implications
  • the investigation of title
  • land registration updates

Even in the case of a non-capital value leasehold property you should consider whether the consent of the landlord is required to an assignment, assign the leasehold title and update any Land Registry registration. Whether freehold or leasehold you should also update your Declaration of Trust (recording the 'interest' of each of the partners in the surgery).

Immediate lead up to retirement

CQC registration: You must inform the CQC if a partner retires, but how this is achieved will depend upon whether your partnership registration date is before or after February 2013. If you registered before February 2013 removing a partner will involve cancelling the current registration and lodging a new application as a ‘partnership service provider’. If you registered after February 2013 the removal or addition of a partner’s name is more straightforward. A Regulation 15 Notification must be made prior to the partner’s retirement, together with filing the appropriate form.

NHS England: The retiring partner’s name must be removed from your GMS contract or PMS agreement and the appropriate notice provided to your local area team. If this reduces the number of principals to less than two, this may flag up concerns within NHS England and you will need to provide at least 28 days’ notice. If you are a PMS practice, the specific consent of the local area team will be required in all cases (regardless of principal numbers) so it is important to start this process at an early stage.

Bank: Your bank account name, mandate and any electronic access to the account will require updating.

Medical defence organisation: Depending upon the type of insurance, it may be necessary to amend the policy with your medical defence organisation – and it might even be necessary for a ‘closing payment’ to be made.

Literature and stationery: The retiring partner’s name must be removed from all practice literature and the practice website. This may require the printing of new literature (such as practice leaflets) and the re-design of practice stationery.

Patients, staff and suppliers: In terms of informing patients, it is satisfactory to place an announcement at the practice premises and you may also wish to announce it on the practice’s website or in your newsletter. Both the retiring partner and the continuing partners should agree the wording of such announcement.

You may consider it appropriate for the retiring partner to tell the staff personally or in writing (with the wording to be agreed). All suppliers should be informed of the retirement and that their business will continue with the new partnership.

Post retirement

HMRC: HMRC will need to be informed of the change in partners for noting the detail of the ‘employer’ and assessing income tax on the profits. If the retiring partner has been the precedent partner, the post will have to be taken up by another partner.

Accounts: The practice accountants will need to prepare retirement accounts and advise on any payment due to the retiring partner. Depending upon the year-end, this process will take at least 3–4 months (to allow for QOF monies) and may take much longer.

London Gazette: When advertised in the London Gazette, notification of a change in the partnership has the effect of notifying the 'world' and is therefore considered sufficient notice of a retirement for someone who has not previously had dealings with the partnership.

Seek advice

Whilst this checklist forms a good starting point, it should not be regarded as exhaustive and it is essential proper advice is taken about other notifications that may be required in the circumstances of your practice. Above all, it is essential that sufficient and proper notice is given to ensure a retired partner does not remain ‘on the hook’ and beholden to their partners for an indemnity post the date of their retirement.

  • Lynne Abbess is partner and head of primary care and Neha Shah is a senior solicitor at Hempsons
  • Lynne is Medeconomics' legal expert - ask her your questions

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