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Is it too easy?

26 July 2011 / Jan Ellis
Issue: 4314 / Categories: Comment & Analysis , Business , Income Tax

Appointing a corporate partner to a partnership is not as simple as it seems


  • Nature of the partnership.
  • Complications surrounding goodwill.
  • Mitigating a charge under the employment-related securities rules.
  • Possible application of IR35.
  • Bring in a corporate partner from the start rather than later.

The position relating to corporate partners in a partnership or members of a limited liability partnership (LLP) has been the subject of a number of questions in the Readers Forum recently.

In this article I will explore the issue in more depth and show that it is not necessarily as straightforward as it looks.

Why do it?

With corporation tax rates falling and personal tax and National Insurance rates rising there are at first sight potentially significant tax savings to be made from incorporation.

Assuming a profit share of (i) £50 000;...

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