Market traders

A client has approached us with a view to forming a UK limited liability partnership to act as investment advisers. The concept is to create an offshore fund into which the members of the partnership would inject capital in equal proportion with which to trade in futures.

The offshore fund could be a British Virgin Islands company with appropriate trustees etc. and the partnership would provide the investment advisory work for which an investment management fee would be charged.

I have seen this in operation elsewhere and did not think there would be any difficulties but a colleague in the office has suggested that the fund would be associated by HMRC because of the capital being provided solely by the members.

My colleague thinks that the full British Virgin Islands company income each year having been originally sent offshore by the members of the partnership...