B7.528 Partnership converting to an LLP
Where a general or limited partnership converts to an LLP there are several tax implications that need to be considered as discussed below. The factors to be taken into account in determining if a succession has occurred are the same as those described in B7.525.
For income tax purposes a partnership is not, unless otherwise indicated, regarded as an entity separate and distinct from the partners1—ie it is transparent.
An LLP is however regarded as a separate legal entity2 (see B7.107), but if it carries on a trade, profession or business with a view to profit it is regarded for tax purposes as if it were a partnership3.
Therefore, when a partner carries on a trade through a partnership and then, without pausing for breath, starts