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LLP Partner - Tax Efficient Income

I'm currently a sole trader, soon to open an LLP and also become a partner. My LLP and Sole Trader are to be two separate business types not connected in any way.

How do I go about paying myself as a partner in an LLP? What would be the most (income) tax efficient way of paying myself a regular monthly wage? Would it make sense to bill the LLP as a sole trader, or is this not necessary? 

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20th Feb 2012 09:13

Perhaps you have not understood what a partner is

but why do you think you will get a wage?

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Have you taken advice?

I've noticed that you have started three threads all on the same subject.

I would strongly advise that you speak to an accountant who could help clarify your tax status for you and how you will earn an income.

Basically as a sole trader or a partnership you will pay income tax on your business profits. 

You won't earn a 'wage' as such, any money you take out of the businesses during the course of the year will be treated as drawings.

Drawings does not equal profit, make sure you understand the difference now rather than later.

 

 

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21st Feb 2012 00:08

You'll be taxed on your share of profits from LLP

The amount of money you draw out is not relevant to the calculation of your taxable profits. The LLP doesn't have a tax liability of its own. It's very different to a company structure where your questions would be more relevant.

Mark

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