HMRC have been targeting limited liability partnerships and their members’ interests whether pursuant to the mixed member rules applicable to LLPs various anti-avoidance provisions or otherwise. As LLPs seek to allocate rights to capital and income in increasingly complex ways it is critical for members or partners to ensure their rights regarding capital accord with the fundamental principles governing the components of a capital stake. This is so because even though the distinction between income and capital receipts is an age-old question the nature of a capital stake and the tax treatment of any receipts on disposal is on the agenda again and being revisited in the context of LLPs. The importance of these principles which involve both corporate and tax issues is brought to bear by recent case law in which HMRC has challenged the veracity of ‘capital’ interests and has...
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HMRC have been targeting limited liability partnerships and their members’ interests whether pursuant to the mixed member rules applicable to LLPs various anti-avoidance provisions or otherwise. As LLPs seek to allocate rights to capital and income in increasingly complex ways it is critical for members or partners to ensure their rights regarding capital accord with the fundamental principles governing the components of a capital stake. This is so because even though the distinction between income and capital receipts is an age-old question the nature of a capital stake and the tax treatment of any receipts on disposal is on the agenda again and being revisited in the context of LLPs. The importance of these principles which involve both corporate and tax issues is brought to bear by recent case law in which HMRC has challenged the veracity of ‘capital’ interests and has...
If you are not a subscriber, subscribe now to read this content.
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