Everything about UK Partnerships

13.05.2014

Revenue Service in UK (HMRS) created single manual about Partnerships in the country. This manual is an almanac of all information needed to find an answer for any question about creation, functioning and liquidation of all types of partnerships in United Kingdome.

The main focus is on the direct taxation of the partnerships with a special accent on the corporate and income taxes.

For taxation purposes partnerships are considered as an activity performed by each partner limited to its share and not as an activity performed by the partnership itself. In accordance with Partnership Act, in case of the taxation each partner is paying the tax from its interest on the share.

Partnerships that receive their income in UK even if they are managed or controlled from outside of the United Kingdome are subjects to the tax.

Partnership may be exempt from the taxation in two cases:

• It is performing activity without purpose of profit;

• It is in the process of liquidation.

More detailed information about taxation of the partnerships maybe found in the HMRS documents BIM82115 and CG27050.

Source: http://www.hmrc.gov.uk/manuals/pmanual/index.htm

Expert’s opinion

United Kingdome is one of the most favorable jurisdictions for management and business structuring. UK Government created legal instrument for the optimization and minimization of the taxation – partnership. This form of business while used appropriately helps substantial lowering of tax burden.

Despite that, UK is a prestigious European jurisdiction that is not on any of the “black” lists. Obviously, the usage of the British partnerships has its perks, therefore, for registration of the company in EU or for the setting up of the account in good European bank UK is the best option.

Alexandra Mihno ( Lawyer, Honest&Bright)