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LLP premises

08 May 2012
Issue: 4352 / Categories: Forum & Feedback
A, B and C are sisters and partners in an LLP investing in residential property. A lived in one of the properties for a year

A B and C are sisters and are the partners in an LLP where the sole activity is residential property investment. For a period of one year A resided in one of the properties at less than market rent as agreed with B and C.

On enquiry HMRC claim that the full market rental should be included as income for tax purposes. We believe that the only adjustment should be to disallow any expenditure incurred on that property for the related period.

Readers’ views on the correct treatment would be welcome.

Query 17 985 – Perplexed

Reply from Lymmtax

Limited liability partnerships are transparent so members are taxed as if they were individuals carrying on business as sole traders or in this case as individuals carrying out a property investment business.

The accounts for property investment businesses have to be compiled using business...

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