Guidance

HS380 Completing Partnership Tax Returns for partners non-resident in or domicile outside the UK (2024)

Updated 6 April 2024

This helpsheet gives information to help you fill in the Partnership Tax Return if:

• the partnership operates partly overseas
• the partnership includes one or more partners who are not resident in the UK
• a partner becomes or ceases to be a UK resident

1. How non-residence in, or domicile outside, the UK can affect the partnership and its members

Read the notes on the Residence, remittance basis etc pages of the personal tax return to find out about:

• residence
• ordinary residence
• domicile
• remittance basis
• split-year treatment

UK resident partners are liable to UK tax on their share of the worldwide profits of the partnership.

If the partnership is managed and controlled abroad, they may also be taxed on the remittance basis for their share of the overseas profits. This will happen if the partner:

• is not ordinarily resident or domiciled in the UK
• claims the remittance basis of taxation

Partners can make their claim for the remittance basis in the Residence, remittance basis etc pages of their tax return.

Non-resident partners are only liable to tax on:

• UK profits — a corporate non-resident partner is also liable on the overseas profits of a UK permanent establishment

• their share of the partnership investment income that arises in the UK — a corporate non-resident partner should return its share of overseas investment income which relates to a UK permanent establishment

Each partner must self-determine their own residence status. To do this, use the notes on the Residence, remittance basis etc pages of the tax return.

2. What to include in the Partnership Tax Return

What you include in your Partnership Tax Return depends on:

• where your partnership is managed and controlled
• whether your partnership has UK resident partners, non-resident partners or both

2.1 Partnership consists solely of UK resident partners

If all partners are resident in the UK, the Partnership Tax Return should return the worldwide profits of the partnership. These profits should be calculated as if the partnership itself was a person resident in the UK.

If any of the profits have been taxed overseas, you should show the amount taxed in each overseas jurisdiction separately.

2.2 Partnership consists solely of non-resident partners

If all partners are non-resident, the Partnership Tax Return should only show the profits from UK operations. If you are a corporate partner, enter the overseas profit of the UK permanent establishment separately on your return.

2.3 Partnership consists of a mix of UK resident and non-resident partners

If the partnership is managed and controlled in the UK, complete 2 Partnership Statements:

• one to enter the worldwide profit (the UK resident partners will put their share of the worldwide profit in their own tax returns)

• a second to enter only the UK profit (the non-resident partners will put their share of the UK profit in their own tax returns)

If the partnership is managed and controlled outside the UK, only include its UK profit in the Partnership Tax Return.

All partners (whether UK resident or non-resident) must put their share of the UK profit in their own tax returns. Partners are also liable to tax on any overseas profits they share in.

If a partner is taxable on the:

• normal basis — they should include their share of the overseas profit on their tax return
• remittance basis — they should show the appropriate remittances on their tax return

A partnership with at least one UK resident partner liable to tax should return its worldwide profits. HM Revenue and Customs (HMRC) allows the Partnership Tax Return to include only UK profits in certain circumstances, but can ask for worldwide accounts and calculations.

2.4 Partnership as agent for non-resident partners

The profits of each partner are taxable separately. However, the partnership may be taxed as agent for a non-resident partner.

If the UK profits are allocated to many non-resident partners, HMRC might allow you to submit a single tax return for all the non-resident partners.

For more details, write to:

Charities, Large Partnerships and International
Wealthy and Mid-size Business Compliance
S0483 17 West
Newcastle
NE98 1ZZ

3. Partner becomes or ceases to be a UK resident

Special rules apply when:

• a partner becomes or ceases to be a UK resident
• the business is carried on wholly or partly abroad

The partner is treated as having ceased, then immediately recommenced as a partner — this makes sure the right amount of profit is taxed. The partnership profit must be apportioned to and from the date of change of residence. You must identify on the Partnership Tax Return the partner’s share of the UK profit for the period they are non-resident.

If this applies, provide the following details in the ‘Additional information’ box on page 3 of the Partnership Tax Return:

• details of the appropriate calculations
• explanations of how the apportionments were made

On their tax return, the partner concerned should enter the sum of:

• their share of the total profit for the period of UK residence (unless the remittance basis applies)
• their share of the UK profit for the period of non-residence

4. Contact

For support with online forms, phone numbers and addresses, contact Self Assessment: general enquiries.