UK LLP and Foreign equity in foreign company

UK LLP and Foreign equity in foreign company

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A Limited Liability Partnership registered in UK owns 30% of equity of a foreign Limited Liability Company, let’s call them RF1. RF1 gained profit and issued a Protocol of General Meeting and distributed dividends making certain amount of dividend income payable to a UK holding and investment Partnership. All of this happened in the same accounting period which ended on 31 July 2012 falling into the tax year 12-13. The dividend income was never actually paid and remains an asset (a receivable) of the Partnership. All of the Partnership members are companies non-resident in UK, who do not trade in the UK.

1. What is the total tax burden of the Partnership’s members? I believe that this would be 10% of the payable dividend income split between the partners in proportions set out in their Partnership Agreement?

2. Return for which tax year should declare the dividend income, 12-13 or the future tax year in which the dividend income will be paid?

3. How is the Partnership supposed to declare the dividend income? My assumption is that it would go to the foreign pages of SA800 tax return leaving the Trade and Professional Income pages of the return with zero-balance (blank).

4. How are the non-resident company members supposed to declare their profit? Our assumption is that each of the partners should receive a UTR in UK and file a CT600 (or an SA800?)  tax return stating their share of the dividend income as Profits chargeable to corporation tax.

5. What impact would it have on the Partnership's taxation if they purchased additional shares of the RF1 Company so as to increase their share of equity from 30% to 49%?

I would be grateful for any pointers. Many thanks

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By ACDWebb
10th Dec 2012 13:36

Foreign members of an LLP

are only liable on UK source income. So if both the source and all the members are NR it would seem to be a bit of an irrelevance so far as taxation on the members in the UK is concerned

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Replying to lionofludesch:
By righthandbat
12th Dec 2012 14:21

Foreign LLP

Thank you very useful. Would you suggest that going down the UTR/SA402 route for the non-Company members and submitting returns is a waste of time?

 

Robert

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By ACDWebb
12th Dec 2012 14:54

I was under the impression

that all the members were NR companies, but be they NR companies or individuals there is nothing to return if it is non UK income so on the face of it yes it would be a waste of time

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