Acting for both spouses or business partners

Q: What does the Code require when a conflict appears?

Identify it before accepting. R310.5 requires reasonable steps to identify conflicts before accepting a new client or engagement, looking at the relationships between the parties and the service. Keep watching. R310.6 requires alertness to changes, and 310.6 A1 notes that an engagement can become adversarial even though the parties were not in dispute when they instructed the firm. Disclose and obtain consent. Under R310.9, the firm decides whether specific disclosure and explicit consent are needed. Paragraph 310.9 A4 encourages documenting the conflict, the safeguards and the consent where they are not in writing. If consent is refused, stop. R310.10 requires the firm to end or decline the services that create the conflict, or end the relevant relationship. ICAEW's conflicts guidance confirms that where consent is sought and refused, the firm cannot act for both parties. Safeguards suggested in the Code include separate teams with clear confidentiality procedures, restricted file access and an independent reviewer (310.8 A2 and A3). In a small practice these are often impractical, which makes declining one side more likely.

Q: How might this play out?

Illustration only. A firm prepares returns for a married couple who jointly own a let flat. The husband asks about transferring most of his share to his wife, a basic rate taxpayer, to cut the household's tax. The firm explains the effect of section 836 and a Form 17 declaration to both spouses together, with both consenting to joint advice. It points out that the transfer is a real change in ownership and suggests the husband consider independent advice on that point. Two years later, the wife's solicitor asks for the husband's tax returns during divorce proceedings. The firm declines without his consent, tells both clients it cannot advise either on the financial settlement, and continues only with work both agree to in writing.

Acting for both spouses, civil partners or business partners is common and allowed, but each person is a separate client with separate rights to confidentiality and loyalty. Problems arise when advice that suits one disadvantages the other, and when the relationship breaks down. The ICAEW Code of Ethics expects conflicts to be identified early, disclosed, and consented to, and the firm to stop acting for one or both if consent is refused or the parties fall into dispute.

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Who is the client when you act for a couple or a partnership?

Each spouse is taxed independently and is a separate client. That has practical consequences:

Engagement terms. ICAEW’s engagement letter templates include a schedule for personal tax for individuals, sole traders and couples. A joint letter can work, but it must be clear which services are provided to whom and who is responsible for each person’s fees.
HMRC authority. HMRC requires formal authorisation from each client before an agent deals with their affairs, so one spouse cannot authorise the firm for the other.
Due diligence. Regulation 27 of the Money Laundering Regulations 2017 requires customer due diligence on establishing a business relationship, which means each spouse, not just the one who makes contact.

Business partners raise the same question in a different form. The partnership, each partner personally, and any company the partners own are different clients. ICAEW’s guidance on identifying and managing conflicts stresses the need to make clear to all interested parties whom the firm represents, ideally in the engagement letter, because different constituencies within what looks like one client can each assume the firm is acting for them.

Where do the interests of spouses actually conflict?

Most of the time they do not, and the Code does not require the firm to treat every couple as adversaries. The real pressure points are:

Jointly owned property. Under section 836 of the Income Tax Act 2007, income from property held in the names of spouses or civil partners who live together is treated as split equally. A different split is possible only by a joint declaration under section 837 reflecting their actual beneficial interests, notified to HMRC within 60 days; see Form 17. Moving beneficial ownership to the lower earner saves tax for the household but transfers real value from one spouse to the other.
Income shifting. Advice to route dividends, salary or assets to the other spouse may also engage the settlements legislation, and it changes who owns what.
Information asymmetry. One spouse may tell the firm about income, debts or assets the other does not know about.
Separation and divorce. The ICAEW Code lists representing two clients in a legal dispute with each other, such as during divorce proceedings or the dissolution of a partnership, as an example of a conflict of interest (paragraph 310.4 A1).

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What about business partners?

Partners have statutory rights against each other that shape what the firm can share. Under section 24 of the Partnership Act 1890, unless otherwise agreed, partners share equally in capital and profits, and every partner may inspect and copy the partnership books. Section 28 obliges partners to render true accounts and full information of all things affecting the partnership to any partner. So partnership accounts and records are not confidential as between current partners.

Each partner’s personal tax return is a different matter. Advice to one partner about their own position, for example on retirement, a profit share renegotiation or a buyout, can be directly against another partner’s interest. ICAEW’s confidentiality helpsheet notes that current directors and LLP members have equal rights to information about their business, that partnerships can be more complicated and should be considered case by case, and that a former director, partner or member generally has no current right to information, even about the period when they were involved.

How does confidentiality work between related clients?

Paragraph R114.1 of the ICAEW Code requires accountants to respect the confidentiality of information acquired in professional relationships, and the Code specifically warns about inadvertent disclosure to a close business associate or an immediate or close family member. Being married to a client or in business with one gives no right to that client’s information. Disclosure needs the client’s authority or a legal or professional duty or right (R114.3).

In practice this means:

getting each client’s written consent at the outset to share information with the other, and recording any limits;
addressing correspondence about each person’s affairs to that person;
not using what one client said in confidence when advising the other.

What does the Code require when a conflict appears?

Identify it before accepting. R310.5 requires reasonable steps to identify conflicts before accepting a new client or engagement, looking at the relationships between the parties and the service.
Keep watching. R310.6 requires alertness to changes, and 310.6 A1 notes that an engagement can become adversarial even though the parties were not in dispute when they instructed the firm.
Disclose and obtain consent. Under R310.9, the firm decides whether specific disclosure and explicit consent are needed. Paragraph 310.9 A4 encourages documenting the conflict, the safeguards and the consent where they are not in writing.
If consent is refused, stop. R310.10 requires the firm to end or decline the services that create the conflict, or end the relevant relationship. ICAEW’s conflicts guidance confirms that where consent is sought and refused, the firm cannot act for both parties.

Safeguards suggested in the Code include separate teams with clear confidentiality procedures, restricted file access and an independent reviewer (310.8 A2 and A3). In a small practice these are often impractical, which makes declining one side more likely.

What should happen when the relationship breaks down?

Once spouses separate or partners fall out, the firm is in the position the Code describes as representing clients in dispute. The usual course is to tell both clients that the firm can no longer advise either on the issues in dispute, decide which, if either, it will continue to act for on routine compliance, and issue disengagement letters. Requests from either party’s solicitors should be refused without the relevant client’s authority unless a court order requires disclosure, as ICAEW’s confidentiality helpsheet explains. Tax on transfers between separating spouses is covered in capital gains on separation and divorce.

How might this play out?

Illustration only. A firm prepares returns for a married couple who jointly own a let flat. The husband asks about transferring most of his share to his wife, a basic rate taxpayer, to cut the household’s tax.

The firm explains the effect of section 836 and a Form 17 declaration to both spouses together, with both consenting to joint advice.
It points out that the transfer is a real change in ownership and suggests the husband consider independent advice on that point.
Two years later, the wife’s solicitor asks for the husband’s tax returns during divorce proceedings. The firm declines without his consent, tells both clients it cannot advise either on the financial settlement, and continues only with work both agree to in writing.

What mistakes cause complaints?

Taking instructions from one spouse for both without each client’s authority.
Failing to ask the second party whether they agree to the firm acting for both; ICAEW’s conflicts guidance says this, rather than the decision to act, is behind a significant share of complaints.
Passing one partner’s personal information to another because they share partnership accounts.
Carrying on advising both sides after a separation has started.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.