Q&As

Would a limited liability partnership be classified as a company for the purposes of determining connected persons under section 1122 of the Corporation Tax Act 2010? What about a limited partnership?

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Published on LexisPSL on 08/06/2021

The following Tax Q&A provides comprehensive and up to date legal information covering:

  • Would a limited liability partnership be classified as a company for the purposes of determining connected persons under section 1122 of the Corporation Tax Act 2010? What about a limited partnership?

Would a limited liability partnership be classified as a company for the purposes of determining connected persons under section 1122 of the Corporation Tax Act 2010? What about a limited partnership?

Section 1123 of Corporation Tax Act 2010 (CTA 2010) defines ‘company’ for the purposes of CTA 2010, ss 1122 and 1123 only as including ‘any body corporate or unincorporated association’ but not including a partnership. A similar definition of company, which also includes body corporates and excludes partnerships, is used for the general purposes of the Corporation Tax Acts in CTA 2010, s 1121.

Under section 1(2) of the Limited Liability Partnerships Act 2000 a limited liability partnership (LLP) is a body corporate.

As explained in Practice Note: Taxation of UK LLPs, LLPs are, provided they meet the requirements set out in section 1273 of the Corporation Tax Act 2009 (CTA 2009), for tax purposes treated as if they were partnerships, ie on a tax transparent basis, so that the profits of the LLP are taxed in the hands of the partners, not the partnership itself.

CTA 2009, s 1273(2)(c) states that references in the Corporation Tax Acts to a company do not include references to an LLP ‘except as otherwise provided’ and CTA 2009, s 1273(2)(a) states that references to a ‘firm’ include an LLP.

In HMRC Manual: PM131450, HMRC states that ‘Although in

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