Examining the proposals on partnerships and LLPs

HMRC published on 20 May 2013 a detailed set of proposals for consultation on changes to the taxation of partnerships and limited liability partnerships (LLPs). The proposals cover two areas:

• the use of LLPs to ‘disguise’ employment relationships (the ‘first limb’ of the consultation); and
• the use of members of LLPs and other kinds of partnership with different tax attributes and the selective streaming of profits and losses  to result in tax advantages for individuals (‘the second limb’).

The financial services industry will be one of the main groups affected by the changes. LLPs are the business entity of...