You might also be interested in
Replies (10)
Please login or register to join the discussion.
re LLPs: Isn't this 'only' about salaried partners?
If memory serves there is a clause in the LLP Act which means that all members (partners) in an LLP are to be treated as self employed for tax purposes. Thus those senior people who were salaried 'partners' are deemed to be self employed if members of an LLP even if they don't receive a profit share over and above their 'salary'. In conventional partnerships they might have been treated as employees unless evidently on a par with other partners re access to accounts, attendance at partners' meetings and receiving a share of profits.
Thus I assume that the issue here concerns only such people and not the full profit sharing partners/members in an LLP.
But it's a good few years since I stopped advising on partnerships and LLPs so am happy to stand corrected.
Mark
Loans to partnerships
I'm awaiting clarification on whether the new legislation will apply to loans to Scottish partnerships. I can't see anything in the technical note that excludes them..
Partnership profit allocation
I am wondering where these measures to counteract the manipulation of profit/loss allocations will be targeted. Hopefully it will be just these aggressive avoidance schemes - which is fair game. The fear is it will extend to husband/wife partnerships involving a non working spouse. That would just force more people down the ltd co route. However it looks like the days of using ltd co partners as a moneybox, for example in dental practices etc may be numbered.
Are hydrids dead?
What about a genuine LLP with individual members and a Limited Company member.
Sizable Capital Account in LLP belonging to Ltd Company.
Does this mean that Limited Company Capital Account must be in effect Nil at all times to avoid S455 charge?
Is the UK becoming a tax haven?
I hear we now have the lowest rate of CT in Europe. It's all very well banging on about offshore tax avoidance, but presumably our European neighbours might soon be introducing their own anti-avoidance rules to prevent their nationals coming over to the UK to take advantage of our low tax rates! In a global economy this needs some joined up thinking - but then that's politics for you!!
close co loans
Will an overdrawn directors current account in a close co be deemed a loan and attract corp Tax if not repaid in full within 9 months of the co financial year end?
@David
Yes, provided the director is a participator. As has always been the case.
Regarding the company's capital account in the LLP (or other partnership) there was discussion on this point recently - my view is that such a capital account is not a debt, and is therefore outside the scope of s455. That view was shared by some, but not all. In any event, I don't see the proposed legislation changing that view.
It'll be interesting.....
It'll be interesting to see how they approach this.
"If memory serves there is a clause in the LLP Act which means that all members (partners) in an LLP are to be treated as self employed for tax purposes."
I believe Mark's correct here and it's always previously been accepted by HMRC that a member of an LLP can't be an employee.
For other purposes, the distinction seems to revolve around 'salaried' or 'fixed profit' ( e.g the Employment Appeals Tribunal decision in Tiffin v Lester Aldridge LLP where it was held that held that a fixed share partner was not an employee.)
I'd suggest a review of that and similar cases should be undertaken when reviewing LLP members. My guess is that HMRC will be looking at salaried members but will struggle with fixed-profit members.
Andrew
close companies
presumably the point here is that whereas an LLP is treated, inter alia, as a regular partnership for corporation tax, sec 455 tax is not "corporation tax".
Harry