Commentary

A7.313 Promoters of tax avoidance schemes—partnerships

Administration and compliance

A7.313 Promoters of tax avoidance schemes—partnerships

A7.313 Promoters of tax avoidance schemes—partnerships

HMRC has the power to stop persons promoting certain arrangements that may give rise to a tax advantage. HMRC can also require such persons to maintain certain conduct and monitor them if they fail to do so. This is known as the promoters of tax avoidance scheme (POTAS) regime. For an overview of the regime, see A7.301. For the key definitions, see A7.301A.

This article considers how the POTAS regime discussed in A7.301–A7.312 applies to partnerships.

Promoters of tax avoidance schemes—partnerships

Where persons are carrying on a business in partnership, the partnership1 is treated as a person for the purposes of the POTAS rules and the main provisions of the legislation apply to partnerships with relevant modifications. This includes limited partnerships2, but not limited liability partnerships (LLP), as they are bodies corporate and treated as such for the purposes of the legislation.3

A partnership is regarded as the same partnership and same person despite changes in the members of the partnership, as long as there is at least one person who was a member of the partnership before and after the change4.

The partnership is deemed to have done any act that binds its members or to have failed to comply with any obligation of the firm with which the members failed to comply. However, those provisions only apply to members of a partnership or general partners of a limited partnership who were members or general partners when the act or failure occurred. A member who had left

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