The decision in Swift ([2010] UK FTT00399 see Tax Journal dated 19 April 2010 p 17) raises some interesting questions.
Are the Memec tests still valid? The six tests of whether an entity is transparent or opaque derived from Memec plc v CIR (71 TC 77) were considered and the LLC in Swift satisfied four of these: legal existence carries on business responsible for its debts and beneficially owns its assets. But the LLC was found not to have issued share capital and its profits were found to belong to the members as they arose. This last point was the major ratio for the decision which suggests that the other Memec tests are irrelevant. Once the profits of the LLC were found to belong to the LLC's members the members were directly taxable on those profits.
Is the LLC a company? This...
