Foreign Partner - SA109?

Foreign Partner - SA109?

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Hi All,

And before I launch into the question, I would like to wish everyone a Merry Christmas!

The question...

I have recently taken on an LLP client for whom I have prepared accounts and the partnership return. No problems with any of that however... three of the partners are non-resident foreign nationals and I am in the process of preparing their personal ITRs. The situation is as follows:

1. The partners reside in (and are nationals of) Germany, USA and Denmark
2. The partners are not entitled to fixed drawings and no profit (or loss as is the case) has been allocated to them
3. To all intents and purposes, the returns are Nil with no income or expenditure from any streams

I'm a little rusty on "foreign nationals" to say the least but agreed to submit these returns as part and parcel of the LLP accounts/ return.

Clearly, I am confident in my abilities in submitting the core return and the partnership pages. However, my question is this...

..."Do I need to submit an SA109 supplementary schedule?"

The partners have never been resident in the UK and the number of days spent in the UK varies from none to a handful. They are not claiming UK tax allowances. I do not believe there to be any domicile issues. However, with no income in the UK, is there a requirement to claim double taxation relief or to opt for a remittance basis?

I'm sure I'm reading too much into this but, I also, understandably, don't want to leave any stone unturned.

I look forward to your comments and would like to thank you in advance.

Kind regards

Dave

Replies (4)

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By DKB-Sheffield
24th Dec 2014 14:11

Answer from HMRC

Hi All,

Thanks for reading. I have now been in touch with HMRC and have been informed as follows:

1. Complete SA109 to confirm the "tax payer" is a foreign national (Box 1 plus any boxes 2-14 which are relevant)

2. Put a cross in box 16

3. Put country code in box 17 (DEU in the case of Germany)

4. Put country code in box 18

5. Put country code in box 19

Leave remainder of form blank.

I though I'd pop this answer down in case anyone else had an identical query in the future.

Kind regards and Merry Christmas

Dave

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By David Treitel
26th Dec 2014 21:04

I would hope that the entity has made a check the box election to in the US to assist the US citizen partner. You may want to enquire as you are advising the partnership.  

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By DKB-Sheffield
27th Dec 2014 18:25

Hi David

Thank you so much for your comment. I'm afraid I'm not that well-versed in US taxation.

I will double check but, have a feeling the answer may be a blank expression. Is there any way I can find out if the election had previously been made? I assume I will need to make the relevant annual submissions in the US. Furthermore, is there any marked difference at this stage between making the election and not (given the fact the US partner is receiving neither profit nor loss shares (in other words is the election essential at this stage)?

I am happy for you to advise me in your professional manner if you would like to PM me with rates etc. so that I can seek the relevant approvals from the partnership members.

Kind regards

Dave

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By David Treitel
29th Dec 2014 06:42

An English LLP is a body

An English LLP is a body corporate under UK law, although treated for UK purposes as a partnership (i.e. transparent).  

For US purposes an English LLP is opaque unless the entity has elected to be transparent.

The election is made at entity level, but the US person partner will hopefully  have taken advice at the outset so you would do best to ask that person for details of advice already obtained. 

 

 

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