Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

LLP problems

01 April 2014
Issue: 4446 / Categories: Forum & Feedback , Business , Partnerships

In 2002, a sole trader transferred his business to a limited liability partnership with a corporate partner. The company’s profit share pays for a small salary to the trader and generates entitlement to state second pension

Our client operated his business as a sole trader until 2002. For various non-tax reasons he then moved the business into a newly formed LLP. The other partner is a limited company formed at the same time. The limited company is controlled by our client and has a small trade of its own.

Each year a share of the profits of the LLP is allocated to the company. Out of the company profits a salary is paid to our client. As a result of this arrangement our client has established 12 years of entitlement to state second pension.

Our client is minded to continue in this vein after 5 April 2014. If he does so and if HMRC is successful in enforcing the type of adjustment foreseen in Finance Bill 2014 will my client suffer double taxation?

Query 18 363 – Leapy Lee

Reply from Cello Boy


If you or your firm subscribes to, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.

back to top icon