June 22nd, 2020 / Insight posted in MKS News

Taxation: Andrew Constable’s article “Tax transparency of general and limited liability partnerships”

Andrew Constable untangles the legal intricacies of partnerships. It is a truth universally acknowledged that partnerships and limited liability partnerships (LLPs) are transparent for tax purposes. But what exactly this statement means in practice, and how widely it should apply, is not always entirely clear. If we examine how partnerships and LLPs are treated in a range of tax areas, we can see that although the idea of ‘transparency’ is very useful, it is not always the whole story. It is understood that partnerships cannot be ‘intermediaries’ and that, instead, any reporting obligations will fall on individual partners. The same will not apply for LLPs, which – as corporate entities – can be intermediaries in their own right.

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