Income Tax (Trading and Other Income) Act 2005 section 863

Limited liability partnerships

Section 863 sets out how limited liability partnerships (LLPs) are treated for income tax purposes as if they were ordinary partnerships, with activities, transactions and property attributed to the individual members rather than to the LLP itself.

• Where an LLP carries on a trade, profession or business with a view to profit, all its activities are treated as carried on by its members as partners, not by the LLP as a separate entity
• References to firms, partnerships and their members in the Income Tax Acts include qualifying LLPs and their members, while references to companies and company members do not
• The partnership treatment continues during temporary cessations of trade and during a winding-up period, provided the winding up is not connected with tax avoidance and is not unreasonably prolonged
• Partnership treatment ceases on the appointment of a liquidator, the making of a winding-up order by the court, or any equivalent event under the law of a territory outside the United Kingdom