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Pride and partnerships
Key points
- In English law a general partnership is not a separate legal person.
- A partnership is not a separate entity for income tax corporation tax or capital gains tax purposes.
- Tax deductions for expenditure must be claimed through the partnership tax return.
- The principle of tax transparency broadly applies to the ‘loans to participator’ rules.
- There is some uncertainty of treatment where shares are owned by a partnership.
- Complications may arise if a partnership interest is acquired as a current asset.
- A change in partnership sharing ratios will not normally be regarded as a transfer for SDLT purposes.
It is a truth universally acknowledged that partnerships and limited liability partnerships (LLPs) are transparent for tax purposes. But what exactly this statement means in practice ...
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