Does everyone remember a while back HMRC were pursuing partners in LLPs in an attempt to associate their companies even though there were no other links between these people? (see New HMRC attack on associated companies posted 10-10-2006).
I heard from a "man in the know" back in February that this was being dropped as it was not an official target of HMRC. It does in fact now seem to have been dropped but I am curious that there has been no reason given or changes in legislation/concessions that I am aware of to back this up.
I know the press release in March 2007 on sideways loss relief meant the end for a lot of planning using LLPs anyway (in HMRC eyes at least) but wonder if anyone has specific knowledge about the associated company issue.
Martin
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Nothing official has been published
but the Revenue have withdrawn the 'Wick' letters, I understand.
There is a legal point generally about the attqack on partnerships, not merely LLP's. If company cntrolled by a partner submits a CT return in good faith, where does the legislation require or enable the Directors of the company[who may not be the controlling party] to ascertain the number of associated companies controlled by fellow partners-. If the directors maintain that they are unaware of any such companies, on what grounds can HMRC deny small company rate.
In the extreme, the controlling individual who inherited a small share in a family business may be an estarnged sibling of the director.[This is not merely theoretical]