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

M's contribution to the limited liability partnership: the basic calculation

Section 863E defines what counts as a member's capital contribution to a limited liability partnership and sets out the basic calculation used to determine that amount for the purposes of the salaried member rules.

• A member's contribution ("Amount A") is the total capital contributed to the LLP, reduced by any amounts previously withdrawn, receivable back, or reimbursable by another person
• Retained profits that have been added to the partnership's capital count as part of the member's capital contribution
• Profits for this purpose are calculated using generally accepted accounting practice, before any tax adjustments
• Withdrawals or receipts back of capital count whether they occur directly or indirectly