Business partnership changes

The deceased partner's executors are entitled to remove their capital from the business. Future profits may be split among the remaining partners unless they continue to use the deceased partner's partnership property.

Partnership debts

The partners in the old partnership have the right to use partnership property to pay outstanding debts, and to split what remains between themselves in accordance with the partnership agreement. This does not include income tax or National Insurance contributions, as partners are responsible for paying these individually.

What happens to the partnership if a partner dies?

If there are two partners, and a partner dies, the partnership will be automatically dissolved. The remaining partner must re-register for Self Assessment as a sole trader.

If there are more than two partners, the partnership will be dissolved unless the partnership has agreed otherwise.

If the nominated partner dies, the partnership must nominate another partner and tell HM Revenue & Customs (HMRC) as soon as possible. If they do not, HMRC will nominate one and write to the partnership. That partner must then complete any outstanding partnership tax returns.

Reporting changes to limited partnerships

For limited partnerships and limited liability partnerships, you need to inform Companies House when a member joins or leaves. For more information, see reporting changes to Companies House.