Transfer of a partnership to an LLP

Produced by Tolley in association with

Owner-Managed Businesses

Guidance

This note explains the general rules that apply on the transfer of a general partnership to an LLP. Both commercial and taxation aspects need to be considered. For guidance on the incorporation of an LLP, see the How to set up an LLP guidance note.

General taxation implications of changing to an LLP

Income tax

Where the transfer of a general partnership to an LLP is undertaken and both the trade and at least one of the partners / members before and after the transfer are the same, it is generally neutral for tax purposes.

The trade of the general partnership is not treated as ceasing and there is no commencement of a new trade within the LLP. Therefore, where the basis period rules applied prior to 2024/25, there was no impact on the members’ notional trade (see the Tax year basis from 2024/25 onwards guidance note) and they continued as if nothing has happened. Following the basis period reforms, the commencement and cessation rules for a partner’s notional

Access this article and thousands of others like it
free for 7 days with a trial of Tolley+™ Guidance.

TAKE A FREE TRIAL

Jackie Barker

Tax Partner at Wells Associates , Corporate Tax, OMB, Employment Tax, Personal Tax, VAT, IHT Trusts and Estates, Accounting

I have worked in tax since becoming an associate of the CIOT in 2004, having previously qualified as a member of ACCA. As tax partner with Wells Associates I advise on all aspects of direct taxation including personal and corporate planning. We work with a wide range of individuals and owner-managed businesses offering guidance and support at all stages, from assisting with compliance matters through to advising on more complex strategic matters and providing tax efficient solutions.

Popular Articles

Trusts and Inheritance Tax

Gifts out of surplus income

Gifts out of surplus incomeA valuable exemption from inheritance tax (IHT) applies to gifts out of surplus income. This exemption applies only to lifetime gifts and is therefore a key part of lifetime planning. The exemption applies to both outright gifts and gifts into trust. Gifts which meet the

14 Jul 2020 11:48 | Produced by Tolley in association with Emma Haley at Boodle Hatfield LLP Read more

Employment Tax

Long service awards

Long service awardsEmployee recognition by an employer can be an important motivational tool, as well as having a positive effect on retention. Most employer awards made to an employee are treated as taxable earnings under ITEPA 2003, s 62 or as a benefit under ITEPA 2003, s 201 because they are

14 Jul 2020 12:11 | Produced by Tolley Read more

Owner-Managed Businesses

Capital allowances on cars

Capital allowances on carsSummary of capital allowances on carsThe current capital allowance rates applicable to cars are as follows:Pool typeDescription of carRateLegislationMain rate poolNew and unused cars with CO2 emissions of 50g/km and below 18%CAA 2001, s 104AASecondhand cars with CO2

14 Jul 2020 11:08 | Produced by Tolley Read more

��˾��ҹ��