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US limited liability corporations: updated HMRC guidance

HMRC’s updated guidance on the treatment of profits arising within, and distributions from, US LLCs is unsatisfactory in a number of respects, write Sebastian Prichard Jones and Andrew Crozier (Macfarlanes).

The Anson decision

On 12 December 2023 HMRC issued updated guidance on the treatment of profits arising within and distributions from US limited liability corporations (LLCs) (see International Manual at INTM180000–180050). The guidance replaces the interim guidance which was issued in light of the Supreme Court decision in Anson v HMRC [2015] UKSC 44 (Revenue & Customs Brief 15/2015). We refer to the updated guidance as the 12 December guidance in the analysis below.

The Anson case had ramifications in a number of areas but at its heart turned on two questions: first under the terms of Delaware law and the relevant LLC agreement (which set out the key operating terms of the LLC) ...

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