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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5145
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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Taxation of non-resident partners in LLP I know that non-resident

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Taxation of non-resident partners in LLP
I know that non-resident partners are only taxed on their UK profits and not on overseas profits but how is the source of profits defined? We are a fund management company and we have two large clients, one in the UK, one in the US. Lets assume that the revenue between these two is the same and profits are equal as well. All the work is undertaken in the UK. What proportion is overseas profits, 50% or nil?
Hello and welcome to the site. Thank you for your question.

Please clarify that work is done in the UK for all clients whether the client is based in the UK or some other country and billed out of the UK setup.

many thanks
Customer: replied 3 years ago.

All the work is done in the UK in the example I used.

Andrew, thank you for your reply.

As all the work is done in the UK then income has arisen in the UK and therefore profits (100%) would be chargeable to UK taxation, irrespective of client base.

Non-resident partners would also be liable to tax on profits arising out that income, I'm afraid.

I hope this is helpful and answers your question.
Customer: replied 3 years ago.

No thats fine, I was just checking. We also have a Guernsey company which is currently not a corporate member of the LLP, but could be. If the Guernsey company did the US work, would this alter the calculation?

Thanks for your reply.

As long as income stays outside the UK setup, and that profits from the Guernsey company remain offshore, it would work.

I hope this is helpful. and other Tax Specialists are ready to help you

Hello Andrew

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