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20 December 2000
Tax Bulletin
It's Official
Extracts from the Revenue's fiftieth Tax Bulletin.
Limited liability partnerships
Computation of taxable profits of professional businesses
It's Official
Extracts from the Revenue's fiftieth Tax Bulletin.
Limited liability partnerships
Computation of taxable profits of professional businesses
Tax Bulletin
It's Official
Extracts from the Revenue's fiftieth Tax Bulletin.
Limited liability partnerships
Computation of taxable profits of professional businesses
In Tax Bulletin Issue 38 (December 1998, page 606) the Revenue set out guidance on what is meant by 'true and fair view' for the purposes of calculating the taxable profits of a professional business. It is confirmed that those rules will apply equally to the computation of the Case II, Schedule D profit of a limited liability partnership which carries on a professional business for the purposes of calculating the income tax liability of the members of the partnership.
Capital allowances
Where a limited liability partnership succeeds to a business previously carried on by an old partnership this will not of itself give rise to a balancing event for the purposes of the capital allowance provisions.
Interest relief
Members of a limited liability partnership, who are individuals, will be entitled to claim interest relief on the loans they obtain in order to defray money applied in the circumstances set out in section 362(1), Taxes Act 1988 provided that they otherwise meet the conditions of the relief.
Extra-Statutory Concession A43 covers interest for investments in partnerships. Where an ordinary partnership converts to a limited liability partnership, the existing terms of the extra-statutory concession are not appropriate, to preserve existing relief. To rectify this the Revenue is considering what changes should be made to the text. (A 1907 limited partner would not have been entitled to such relief in the first place, so it would be inappropriate to extend Extra-Statutory Concession A43 to those circumstances.)
Loss relief
Unlike section 117, Taxes Act 1988, the undrawn profits of a member of a limited liability partnership cannot normally be added to his subscribed capital in order to calculate the limit of his entitlement to sideways loss relief. This is because, subject to any agreement between them, a member's undrawn profits will normally be regarded as a debt of the limited liability partnership. This means that the member ranks, for that sum, alongside the other creditors in the event of liquidation. If however the terms of the agreement between the members specifically provide that the undrawn profit stands as part of a member's capital contribution and that agreement is unconditional then that amount can be taken into account in calculating the limit.
The following example shows how the provisions of section 118C-D will apply.
Example
Mr A becomes a member of a limited liability partnership on 6 April 2003. He introduces capital of £10,000 into the partnership. The partnership carries on a trade. During the year ended 5 April 2006 he makes a further capital contribution of £6,000.
His share of the Case I loss is as follows and he claims relief under section 380, Taxes Act 1988 for those losses against his other income.
Year ended 5 April 2004 £6,000
Year ended 5 April 2005 £6,000
Year ended 5 April 2006 £3,000
Mr A is entitled to section 380 relief as follows:
2003-2004 £6,000 (unrelieved capital contribution £4,000)
2004-2005 £4,000(1) (unrelieved loss £2,000)
2005-2006 £5,000(2) (unrelieved capital contribution £1,000)
The sideways loss relief is restricted to the unrelieved capital contribution brought forward of £4,000. The balance of the loss of £2,000 (£ 6,000 - £4,000) is carried forward. The sideways loss relief of £5,000 is available i.e. loss of year £3000 + unrelieved loss brought forward £2,000. Unrelieved capital contribution carried forward is £1,000 i.e. total contributions £16,000 less total sideways loss relief given £15,000.
The provisions in section 118C-D (restriction of sideways loss relief to members of a limited liability partnership) do not apply to a limited liability partnership which carries on a profession, only to one which carries on a trade. Provided that the conditions for relief are otherwise met; a member of a limited liability partnership which carries on a profession rather than a trade will be entitled to loss relief, either under the normal sideways loss relief provisions, or under section 109 if he has left the partnership, or the partnership has ceased business.
Overlap relief
If, on conversion, a limited liability partnership succeeds to the business previously carried by an old partnership then a partner's personal trade or profession will be regarded as continuing. He will be entitled to a deduction for overlap relief at the time they finally retire from the limited liability partnership (or perhaps earlier if the limited liability partnership changes its accounting date).
Demergers
Where a limited liability partnership takes over only part of the old partnership's trade, such an event constitutes a demerger to which Statement of Practice 9/86 applies. Unless it can be shown that on the demerger the part of the business carried on by the limited liability partnership is recognisably the business previously carried on by the old partnership, then the cessation provisions will apply.
If it can be shown that the limited liability partnership does carry on the business, as it will have succeeded to the old partnership's business, the cessation provisions will not be applied to the old partnership and any overlap relief will be carried forward.
Cash basis – catching up charge
If on conversion the limited liability partnership succeeds to the business previously carried on by an old partnership then the spreading rules for the catching up charge will continue to apply as if the conversion had not occurred.
Double taxation relief
Where an overseas tax authority regards a foreign branch of a United Kingdom limited liability partnership as a body corporate, the United Kingdom members will be entitled to claim tax credit relief in respect of their proportionate share of the foreign tax paid on the overseas branch's profits.
Dividends
A United Kingdom limited liability partnership is not itself liable to tax in the United Kingdom as the limited liability partnership tax provisions identify other persons, i.e. the members, as the persons who are to be taxed. Accordingly for the purposes of the double taxation agreements, the limited liability partnership is not regarded as being resident in the United Kingdom and cannot itself therefore claim relief from foreign taxes under such agreements.
As is the case with ordinary and limited partnerships, the members must make the claim.
Assuming that they are United Kingdom residents, in accordance with the provisions of the relevant double taxation agreement, the members of a limited liability partnership will be entitled to relief for any withholding tax on overseas dividends. Where a partner is an individual then no relief will be due in respect of the taxes paid (the underlying taxes) on the profits out of which the dividend is paid.
In the very narrow circumstances where the limited liability partnership is not treated as transparent, but instead as a body corporate for tax purposes (such as when it is in liquidation or being wound up in circumstances where transparency cannot be retained, the limited liability partnership could itself claim relief for foreign taxes, including if appropriate underlying tax.
Partnership annuities
Where an obligation to pay an annuity is transferred from the old partnership to the limited liability partnership, then the members of the partnership will be entitled to higher rate income tax relief for their share of the ongoing payments; and incoming members who assume part of that obligation will also be entitled to such relief for their share.
If an obligation to pay an annuity is not transferred to the limited liability partnership and the members of the old partnership continue to pay it, they will be entitled to higher rate income tax relief for their share of those payments until such time as they cease to be a member of the limited liability partnership or until the business originally carried on by the old partnership ceases, whichever is the earlier.
Capital gains
Partners capital interests
So long as the limited liability partnership carries on a trade or profession with a view to profit, a partner's capital interest will not be regarded as a chargeable asset in its own right. In these circumstances the members of the limited liability partnership will be directly taxable on their share of the chargeable gains arising on the disposal of the partnership's assets and there will be no concurrent charge on a non-transparent basis.
Temporary cessation of trading
The transparency of a limited liability partnership for capital gains purposes, is not disturbed by reason of temporary periods during which no trade or profession is carried on by it.
Transfer of a business
Where a business, previously carried on by an old partnership, is transferred to a limited liability partnership then, for the purposes of the capital gains legislation, this will not of itself constitute a disposal by the partners in their interests in the old partnership's assets. This applies equally to the members of partnerships in Scotland as it does to those in England and Wales.
Furthermore such a transfer will not affect:
* the availability of indexation allowance;
* the ownership period for retirement relief;
* the holding period for taper relief.
Statement of Practice D12
The rules set out in SP/D12 apply equally to the members of a limited liability partnership as they do to members of an old partnership. When D12 is next updated it will be amended to incorporate this confirmation.
Liquidations
Where a limited liability partnership ceases to carry on a trade or profession, it will no longer be regarded as a partnership for the purposes of the taxation provisions and will instead be regarded as a body corporate. The limited liability partnership will thus cease to be transparent (section 59A(2), Taxation of Chargeable Gains Act 1992).
Where a limited liability partnership goes into liquidation, chargeable gains on the disposal of the partnership's assets by the liquidator will be computed by reference to the date on which they were first acquired by the limited liability partnership and their cost at that date. In the liquidation period, the limited liability partnership's capital gains will be treated in precisely the same way for tax purposes as those for any other body corporate (section 8(6), Taxation of Chargeable Gains Act 1992).
Limited liability partnership members will be taxed on any gain (or given relief for any loss) that arises on the disposal of their capital interests in the limited liability partnership. The allowable acquisition cost of each partner's interest will be determined according to the historical capital contributions made as if the limited liability partnership had never been transparent. This treatment does not affect preliquidation asset disposals, which remain undisturbed.
Informal winding up
Where the members of a limited liability partnership proceed to wind up its affairs in an orderly way, without the formal appointment of a liquidator, by settling outstanding liabilities and realising the assets following or in the course of a cessation of commercial activity, then it will be accepted that the transparency of the partnership will be preserved during the period in which the assets are being disposed of provided the following conditions are met.
* that the limited liability partnership is not being wound up for reasons connected in whole or in part with the avoidance of tax; and
* that, following the termination of the limited liability partnership's business, the period of winding up is not unduly protracted taking account of the limited liability partnership's assets and liabilities.
If these conditions are not met, then the transparency of the limited liability partnership may be regarded as coming to an end before the informal winding up process has been completed. It is also emphasised that, whatever the circumstances, transparency cannot continue beyond any date on which a liquidator is formally appointed (whether or not that liquidator is charged for a period with completing any outstanding business transactions).
Roll-over relief
Where, as a result of claiming business asset roll-over relief a limited liability partnership member postpones a chargeable gain through their acquisition of a share in a limited liability partnership asset, there is the potential for that gain to fall out of charge in the future by reason of the partnership ceasing to be transparent. This could occur, for example, where the asset remains unsold when the limited liability partnership goes into liquidation and vests in the liquidator (who will compute the gain arising on the disposal of the asset in the course of liquidation without regard to past roll-over relief claims by any limited liability partnership member).
Accordingly, there is a tax liability on the member, at the time when the partnership ceases to be transparent, which is based on an amount equal to the postponed gain or gains which have not then come back into charge. Gains which accrue to a member in consequence of this special provision do not attract taper relief.
Annuities
Provided that the rights remain substantially the same then the transfer of a partner's annuity rights, and the transfer of annuity obligations to former members from an ordinary partnership to a limited liability partnership will not be regarded as a chargeable disposal.
Similarly where an annuitant agrees to the substitution of the limited liability partnership for the predecessor partnership as the payer of the annuity, and the terms otherwise remain substantially the same, then the annuitant will not be regarded as making a chargeable disposal.
Inheritance tax
Where an old partnership incorporates as a limited liability partnership, a partner's period of ownership for both business and agricultural property reliefs will not be regarded as being interrupted.
Deemed transfers by close companies
Because section 267A(d), Inheritance Tax Act 1984, inserted by section 11, Limited Liability Partnership Act, deems transfers of value to be made by the members of the limited liability partnership and not by the partnership itself, liability under section 94, Inheritance Tax Act 1984 cannot arise even if the limited liability partnership might otherwise be a close company.
Stamp duty
Transfer of property
Section 12, Limited Liability Partnership Act requires that for the stamp duty exemption to apply the proportions of property conveyed or transferred into a limited liability partnership must either be unchanged before and after the transfer, or the proportions must not have been changed for tax avoidance reasons. Strictly under property law the partners' interest in the limited liability partnership will replace their interests in the old partnership's assets. In determining whether the stamp duty exemption applies the Revenue will not, however take this point.
The Revenue will accept that any property transferred to the limited liability partnership within one year of its incorporation will qualify for relief from stamp duty under section 12, Limited Liability Partnership Act, provided that the conditions for that relief are met.
Section 12(2) prevents stamp duty exemption being available if property is transferred at the time of the limited liability partnership's incorporation and also there are retirements of former partners and admission of new partners.
Provided that all the other conditions for the exemption are met the Revenue accepts that this charge can be averted by arranging matters so that the change of partners takes place the instant before or after incorporation. To confirm that matters were organised in this way the Stamp Office will need to see all associated documents effecting any change in the membership of the old partnership and of the limited liability partnership prior to or after incorporation, as well as evidence that any stamp duty appropriate to those documents has been paid. It may be necessary to call for further information once these documents have been reviewed.
Transfers of interests
An interest in a limited liability partnership is not a chargeable security for stamp duty purposes. So if stamp duty is due on the transfer of such an interest it will be payable at the 1 per cent, 3 per cent or 4 per cent rate, as appropriate, rather than the 0.5 per cent rate applicable to shares. This is in line with the intention behind the Limited Liability Partnership Act that the treatment of limited liability partnerships should be the same as for partnerships. Since the sale of an interest in any other type of partnership bears duty at the property rates, the sale of an interest in a limited liability partnership will be charged in the same way.
The foregoing are extracts from longer articles published in the Tax Bulletin which is Crown Copyright and to which reference should be made for details of the full text. Information can be obtained from Miss Chowdhury on 020 7438 7812.
It's Official
Extracts from the Revenue's fiftieth Tax Bulletin.
Limited liability partnerships
Computation of taxable profits of professional businesses
In Tax Bulletin Issue 38 (December 1998, page 606) the Revenue set out guidance on what is meant by 'true and fair view' for the purposes of calculating the taxable profits of a professional business. It is confirmed that those rules will apply equally to the computation of the Case II, Schedule D profit of a limited liability partnership which carries on a professional business for the purposes of calculating the income tax liability of the members of the partnership.
Capital allowances
Where a limited liability partnership succeeds to a business previously carried on by an old partnership this will not of itself give rise to a balancing event for the purposes of the capital allowance provisions.
Interest relief
Members of a limited liability partnership, who are individuals, will be entitled to claim interest relief on the loans they obtain in order to defray money applied in the circumstances set out in section 362(1), Taxes Act 1988 provided that they otherwise meet the conditions of the relief.
Extra-Statutory Concession A43 covers interest for investments in partnerships. Where an ordinary partnership converts to a limited liability partnership, the existing terms of the extra-statutory concession are not appropriate, to preserve existing relief. To rectify this the Revenue is considering what changes should be made to the text. (A 1907 limited partner would not have been entitled to such relief in the first place, so it would be inappropriate to extend Extra-Statutory Concession A43 to those circumstances.)
Loss relief
Unlike section 117, Taxes Act 1988, the undrawn profits of a member of a limited liability partnership cannot normally be added to his subscribed capital in order to calculate the limit of his entitlement to sideways loss relief. This is because, subject to any agreement between them, a member's undrawn profits will normally be regarded as a debt of the limited liability partnership. This means that the member ranks, for that sum, alongside the other creditors in the event of liquidation. If however the terms of the agreement between the members specifically provide that the undrawn profit stands as part of a member's capital contribution and that agreement is unconditional then that amount can be taken into account in calculating the limit.
The following example shows how the provisions of section 118C-D will apply.
Example
Mr A becomes a member of a limited liability partnership on 6 April 2003. He introduces capital of £10,000 into the partnership. The partnership carries on a trade. During the year ended 5 April 2006 he makes a further capital contribution of £6,000.
His share of the Case I loss is as follows and he claims relief under section 380, Taxes Act 1988 for those losses against his other income.
Year ended 5 April 2004 £6,000
Year ended 5 April 2005 £6,000
Year ended 5 April 2006 £3,000
Mr A is entitled to section 380 relief as follows:
2003-2004 £6,000 (unrelieved capital contribution £4,000)
2004-2005 £4,000(1) (unrelieved loss £2,000)
2005-2006 £5,000(2) (unrelieved capital contribution £1,000)
The sideways loss relief is restricted to the unrelieved capital contribution brought forward of £4,000. The balance of the loss of £2,000 (£ 6,000 - £4,000) is carried forward. The sideways loss relief of £5,000 is available i.e. loss of year £3000 + unrelieved loss brought forward £2,000. Unrelieved capital contribution carried forward is £1,000 i.e. total contributions £16,000 less total sideways loss relief given £15,000.
The provisions in section 118C-D (restriction of sideways loss relief to members of a limited liability partnership) do not apply to a limited liability partnership which carries on a profession, only to one which carries on a trade. Provided that the conditions for relief are otherwise met; a member of a limited liability partnership which carries on a profession rather than a trade will be entitled to loss relief, either under the normal sideways loss relief provisions, or under section 109 if he has left the partnership, or the partnership has ceased business.
Overlap relief
If, on conversion, a limited liability partnership succeeds to the business previously carried by an old partnership then a partner's personal trade or profession will be regarded as continuing. He will be entitled to a deduction for overlap relief at the time they finally retire from the limited liability partnership (or perhaps earlier if the limited liability partnership changes its accounting date).
Demergers
Where a limited liability partnership takes over only part of the old partnership's trade, such an event constitutes a demerger to which Statement of Practice 9/86 applies. Unless it can be shown that on the demerger the part of the business carried on by the limited liability partnership is recognisably the business previously carried on by the old partnership, then the cessation provisions will apply.
If it can be shown that the limited liability partnership does carry on the business, as it will have succeeded to the old partnership's business, the cessation provisions will not be applied to the old partnership and any overlap relief will be carried forward.
Cash basis – catching up charge
If on conversion the limited liability partnership succeeds to the business previously carried on by an old partnership then the spreading rules for the catching up charge will continue to apply as if the conversion had not occurred.
Double taxation relief
Where an overseas tax authority regards a foreign branch of a United Kingdom limited liability partnership as a body corporate, the United Kingdom members will be entitled to claim tax credit relief in respect of their proportionate share of the foreign tax paid on the overseas branch's profits.
Dividends
A United Kingdom limited liability partnership is not itself liable to tax in the United Kingdom as the limited liability partnership tax provisions identify other persons, i.e. the members, as the persons who are to be taxed. Accordingly for the purposes of the double taxation agreements, the limited liability partnership is not regarded as being resident in the United Kingdom and cannot itself therefore claim relief from foreign taxes under such agreements.
As is the case with ordinary and limited partnerships, the members must make the claim.
Assuming that they are United Kingdom residents, in accordance with the provisions of the relevant double taxation agreement, the members of a limited liability partnership will be entitled to relief for any withholding tax on overseas dividends. Where a partner is an individual then no relief will be due in respect of the taxes paid (the underlying taxes) on the profits out of which the dividend is paid.
In the very narrow circumstances where the limited liability partnership is not treated as transparent, but instead as a body corporate for tax purposes (such as when it is in liquidation or being wound up in circumstances where transparency cannot be retained, the limited liability partnership could itself claim relief for foreign taxes, including if appropriate underlying tax.
Partnership annuities
Where an obligation to pay an annuity is transferred from the old partnership to the limited liability partnership, then the members of the partnership will be entitled to higher rate income tax relief for their share of the ongoing payments; and incoming members who assume part of that obligation will also be entitled to such relief for their share.
If an obligation to pay an annuity is not transferred to the limited liability partnership and the members of the old partnership continue to pay it, they will be entitled to higher rate income tax relief for their share of those payments until such time as they cease to be a member of the limited liability partnership or until the business originally carried on by the old partnership ceases, whichever is the earlier.
Capital gains
Partners capital interests
So long as the limited liability partnership carries on a trade or profession with a view to profit, a partner's capital interest will not be regarded as a chargeable asset in its own right. In these circumstances the members of the limited liability partnership will be directly taxable on their share of the chargeable gains arising on the disposal of the partnership's assets and there will be no concurrent charge on a non-transparent basis.
Temporary cessation of trading
The transparency of a limited liability partnership for capital gains purposes, is not disturbed by reason of temporary periods during which no trade or profession is carried on by it.
Transfer of a business
Where a business, previously carried on by an old partnership, is transferred to a limited liability partnership then, for the purposes of the capital gains legislation, this will not of itself constitute a disposal by the partners in their interests in the old partnership's assets. This applies equally to the members of partnerships in Scotland as it does to those in England and Wales.
Furthermore such a transfer will not affect:
* the availability of indexation allowance;
* the ownership period for retirement relief;
* the holding period for taper relief.
Statement of Practice D12
The rules set out in SP/D12 apply equally to the members of a limited liability partnership as they do to members of an old partnership. When D12 is next updated it will be amended to incorporate this confirmation.
Liquidations
Where a limited liability partnership ceases to carry on a trade or profession, it will no longer be regarded as a partnership for the purposes of the taxation provisions and will instead be regarded as a body corporate. The limited liability partnership will thus cease to be transparent (section 59A(2), Taxation of Chargeable Gains Act 1992).
Where a limited liability partnership goes into liquidation, chargeable gains on the disposal of the partnership's assets by the liquidator will be computed by reference to the date on which they were first acquired by the limited liability partnership and their cost at that date. In the liquidation period, the limited liability partnership's capital gains will be treated in precisely the same way for tax purposes as those for any other body corporate (section 8(6), Taxation of Chargeable Gains Act 1992).
Limited liability partnership members will be taxed on any gain (or given relief for any loss) that arises on the disposal of their capital interests in the limited liability partnership. The allowable acquisition cost of each partner's interest will be determined according to the historical capital contributions made as if the limited liability partnership had never been transparent. This treatment does not affect preliquidation asset disposals, which remain undisturbed.
Informal winding up
Where the members of a limited liability partnership proceed to wind up its affairs in an orderly way, without the formal appointment of a liquidator, by settling outstanding liabilities and realising the assets following or in the course of a cessation of commercial activity, then it will be accepted that the transparency of the partnership will be preserved during the period in which the assets are being disposed of provided the following conditions are met.
* that the limited liability partnership is not being wound up for reasons connected in whole or in part with the avoidance of tax; and
* that, following the termination of the limited liability partnership's business, the period of winding up is not unduly protracted taking account of the limited liability partnership's assets and liabilities.
If these conditions are not met, then the transparency of the limited liability partnership may be regarded as coming to an end before the informal winding up process has been completed. It is also emphasised that, whatever the circumstances, transparency cannot continue beyond any date on which a liquidator is formally appointed (whether or not that liquidator is charged for a period with completing any outstanding business transactions).
Roll-over relief
Where, as a result of claiming business asset roll-over relief a limited liability partnership member postpones a chargeable gain through their acquisition of a share in a limited liability partnership asset, there is the potential for that gain to fall out of charge in the future by reason of the partnership ceasing to be transparent. This could occur, for example, where the asset remains unsold when the limited liability partnership goes into liquidation and vests in the liquidator (who will compute the gain arising on the disposal of the asset in the course of liquidation without regard to past roll-over relief claims by any limited liability partnership member).
Accordingly, there is a tax liability on the member, at the time when the partnership ceases to be transparent, which is based on an amount equal to the postponed gain or gains which have not then come back into charge. Gains which accrue to a member in consequence of this special provision do not attract taper relief.
Annuities
Provided that the rights remain substantially the same then the transfer of a partner's annuity rights, and the transfer of annuity obligations to former members from an ordinary partnership to a limited liability partnership will not be regarded as a chargeable disposal.
Similarly where an annuitant agrees to the substitution of the limited liability partnership for the predecessor partnership as the payer of the annuity, and the terms otherwise remain substantially the same, then the annuitant will not be regarded as making a chargeable disposal.
Inheritance tax
Where an old partnership incorporates as a limited liability partnership, a partner's period of ownership for both business and agricultural property reliefs will not be regarded as being interrupted.
Deemed transfers by close companies
Because section 267A(d), Inheritance Tax Act 1984, inserted by section 11, Limited Liability Partnership Act, deems transfers of value to be made by the members of the limited liability partnership and not by the partnership itself, liability under section 94, Inheritance Tax Act 1984 cannot arise even if the limited liability partnership might otherwise be a close company.
Stamp duty
Transfer of property
Section 12, Limited Liability Partnership Act requires that for the stamp duty exemption to apply the proportions of property conveyed or transferred into a limited liability partnership must either be unchanged before and after the transfer, or the proportions must not have been changed for tax avoidance reasons. Strictly under property law the partners' interest in the limited liability partnership will replace their interests in the old partnership's assets. In determining whether the stamp duty exemption applies the Revenue will not, however take this point.
The Revenue will accept that any property transferred to the limited liability partnership within one year of its incorporation will qualify for relief from stamp duty under section 12, Limited Liability Partnership Act, provided that the conditions for that relief are met.
Section 12(2) prevents stamp duty exemption being available if property is transferred at the time of the limited liability partnership's incorporation and also there are retirements of former partners and admission of new partners.
Provided that all the other conditions for the exemption are met the Revenue accepts that this charge can be averted by arranging matters so that the change of partners takes place the instant before or after incorporation. To confirm that matters were organised in this way the Stamp Office will need to see all associated documents effecting any change in the membership of the old partnership and of the limited liability partnership prior to or after incorporation, as well as evidence that any stamp duty appropriate to those documents has been paid. It may be necessary to call for further information once these documents have been reviewed.
Transfers of interests
An interest in a limited liability partnership is not a chargeable security for stamp duty purposes. So if stamp duty is due on the transfer of such an interest it will be payable at the 1 per cent, 3 per cent or 4 per cent rate, as appropriate, rather than the 0.5 per cent rate applicable to shares. This is in line with the intention behind the Limited Liability Partnership Act that the treatment of limited liability partnerships should be the same as for partnerships. Since the sale of an interest in any other type of partnership bears duty at the property rates, the sale of an interest in a limited liability partnership will be charged in the same way.
The foregoing are extracts from longer articles published in the Tax Bulletin which is Crown Copyright and to which reference should be made for details of the full text. Information can be obtained from Miss Chowdhury on 020 7438 7812.
