While every attempt will be made to ensure that information provided is accurate at the time of publication, it should be treated as guidance only and does not constitute legal or professional advice. Tax law and guidance changes frequently and readers are advised to consult the current relevant publication for the most up-to-date information on this topic.

For many years the taxation of partnerships has been something of a poor relation in the tax code. While the mechanisms for assessment of partnerships and similar compliance issues are reasonably detailed, very little practical assistance is granted by the tax code on how to tax partnerships and a number of relatively ad hoc practices have arisen. Indeed, the entire scheme of taxation of partnership capital gains is governed by a Statement of Practice that has been with us for several decades (Statement of Practice D12) and, strictly, should be viewed as an extra-statutory concession (or several ESCs).

So it came of something of a surprise to many people that there were major changes, first in Finance Act 2013 and then in Finance Act 2014 affecting the taxation of partnerships, with further changes to entrepreneurs' relief affecting partnerships in FA 2015.

This Tax Digest is intended to review the new rules for partnerships in the context of loans or other benefits to participators in FA 2013, the rules for salaried members and for mixed partnerships in FA 2014, and the new relating to partnerships and entrepreneurs' relief in FA 2015.

This Tolley Tax Digest will be examining:

  • loans and benefits to participators
  • mixed partnerships
  • salaried members
  • incorporation of partnerships
  • anti-avoidance provisions
  • corporate partnerships and entrepreneurs' relief
  • and much more.

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