Income Tax Act 2007 section 842

UK Economic Interest Groupings and European Economic Interest Groupings

Section 842 sets out the income tax rules that apply to UK Economic Interest Groupings and European Economic Interest Groupings, treating them as transparent entities so that tax falls on the individual members rather than on the grouping itself.

• A grouping is treated as acting as agent for its members, and its activities are regarded as those of the members acting jointly.
• Each member is treated as holding a share of the grouping's property, rights and liabilities, determined by the grouping contract, profit shares, or equally if the contract is silent.
• Any trade or profession carried on by the grouping is treated as carried on in partnership by its members.
• Members of a grouping may be companies, individuals or partnerships, and the rules apply for income tax purposes.