Gigi, Anik, Geo and Milton have been carrying on a retail business in partnership from 2001. Geo has decided to leave the partnership at the end of the 2020. The partners agree that to make things easier, they will prepare the partnership’s tax return on basis that Geo resigned from the partnership at the end of the previous financial year (six months earlier). Required: What are the consequences of this agreement? Assume also that Geo will receive a payment of $2.5m in respect of his interest in the work in progress of the partnership. How is such payment treated?