2: TAXATION OF THE BUSINESS(a) Introduction to taxation of the business17 Overview1A sole trader or a partner will be subject to taxation in respect of both the income and capital profits of the business (or in the case of a partner, in respect of his share of those profits). In relation to income profits the charge will be to income tax, mainly under Parts 2, 3 and 4 of the Income Tax (Trading and Other Income) Act 20052, whilst capital profits or gains are subject to capital gains tax3.Although a limited liability partnership (LLP) is a separate legal personality,
A sole trader or a partner will be subject to taxation in respect of both the income and capital profits of the business (or in the case of a partner, in respect of his share of those profits). In relation to income profits the charge will be to income tax, mainly under Parts 2, 3 and 4 of the Income Tax (Trading and Other Income) Act 20052, whilst capital profits or gains are subject to capital gains tax3.
Although a limited liability partnership (LLP) is a separate legal personality,
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