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On the loan account of a retiring or deceased partner, if the partnership deed specifies interest at 9% per annum, at what rate will the interest be charged?

Answer and explanation

Correct answer: 9%

Since the partnership deed expressly specifies the interest rate on the partner’s loan, the contractual rate must be applied. Therefore, interest will be charged at 9% per annum. Rates such as 8% or 12% would apply only if provided in the deed. Exam tip: For interest on a partner’s loan account, check the partnership deed before applying any other rule.

Related tags

Partner Loan AccountRetirement Of PartnerDeath Of PartnerPartnership DeedInterest On LoanPartner's Loan AccountPartner S Loan AccountReconstitution Retirement Or Death Of A Partner

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