Video:

Government legislation: The HMRC’s Partnership Consultation Document

Author: James Kirk (yBC.tv), Pamela Sayers

Categories: Governance, Tax Planning
Tags: corporate partners, Inland Revenue, liability, LLP, National insurance, partnerships
Government legislation is dealing with tax leakage between corporate partners according to Pamela Sayers, who explains further in this TV show.

Government legislation: Limited liability partnerships

It’s particularly important for professional partnerships and limited liability partnerships because probably for the first time really since the introduction of LLPs in 2000 we’ve seen more changes in partnership taxation in the last 16 years and the Revenue are concerned on two main areas: one being whether there is any disguising of remuneration and avoidance of employers’ national insurance on partners’ salary, so to speak; and also the allocation of profits to corporate partners, because some LLPs and indeed partnerships have a mix of both individual partners and corporate partners. And really on the latter, where there is a corporate partner which is perhaps, in owned, that corporate partner is owned by one of the individual partners, there is a risk that some profits will be diverted through to the corporate partner for corporate partners will be taxed at lower rates than individuals, say 20% as opposed to 47% and the Revenue have been very concerned that there is a tax leakage there.

If you are interested in finding out more about the effects of changing government legislation, browse more TV show on Inside Finance.

 
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