Taxation of a British LLPs and Non-UK Resident Members

The easiest way to start a new company formation

#1. Summary
#2. Open an LLP and Reduce Your Risks
#3. Establishment of an LLP for International Clients
#4. Potential Loss of UK Tax Transparency

The cheapest way to start a new company registration

#5. Using UK Registered LLP for Trading
#6. Foreign Residents Benefit From Registering an LLP
#7. Taxation of a British LLPs and Non-UK Resident Members

Taxation of an LLPs and non-UK resident members

Section 10 of LLP Act and section 1273 CTA 2009 is the main provision in the LLP Act covering the annual taxation of an LLP. The section is brief, and states that a trade, profession or business carried by an LLP shall be treated as thought carried on in limited liability partnership by its members. The effect of the section to ensure that members of an LLP are taxed under the self-assessment rules as thought they were partners in an ordinary partnership.

It means, that if a member of an LLP is not a UK resident, and non-UK domiciled, and the profits of the LLP appropriated to him or her are profits arising from trade, business, investments situated outside of the UK, then such member will not be liable to pay UK tax on such profits.

It is assumed, that the LLP purchasing goods or services in one country, and then sells the goods or services to customers in another country, and that goods do not enter the United Kingdom. If the LLP has two members, corporate bodies incorporated offshore, and those two offshore companies are owned, managed and controlled by person’s resident outside of the Great Britain.