Tax implications of operating and terminating a joint venture partnership
Produced in partnership with Arun Birla and Hannah Gray of Paul Hastings (Europe) LLP and Sara Stewart of Vinson & Elkins RLLP
Tax implications of operating and terminating a joint venture partnership

The following Tax guidance note Produced in partnership with Arun Birla and Hannah Gray of Paul Hastings (Europe) LLP and Sara Stewart of Vinson & Elkins RLLP provides comprehensive and up to date legal information covering:

  • Tax implications of operating and terminating a joint venture partnership
  • Tax implications of operating a joint venture partnership
  • Tax implications of terminating a joint venture partnership

This Practice Note considers the UK tax aspects of the operation and termination of a joint venture operated through a partnership. It is assumed for the purposes of this note that:

  1. the joint venture parties are UK tax resident corporate entities

  2. the joint venture partnership vehicle is also UK tax resident, and

  3. the venture’s operations are carried out in the UK

For information on:

  1. the establishment of a joint venture partnership, see Practice Note: Tax implications of establishing a joint venture partnership, and

  2. joint ventures with a non-UK element, see Practice Note: Tax implications of international joint ventures

This Practice Note does not deal with certain types of investment partnership constituting unit trust schemes that may not be treated as transparent for tax purposes.

Tax implications of operating a joint venture partnership

Broadly a joint venture partnership operates no differently from any other partnership, since partnerships are, by definition, joint operations. As a result what follows here are brief summaries of the tax consequences of operating a joint venture partnership, with references to more detailed Practice Notes where relevant.

Taxation of partnership trading profits and losses

Partnerships (including limited liability partnerships (LLPs)) which are not treated as unit trust schemes are treated as transparent for most tax purposes, including the taxation of trading profits and losses. This means