PM212000 - Company partners and tax mitigation

Companies can be partners in partnerships or members of LLPs. In recent years there has been an increase in the number of mixed member partnerships and LLPs, typically consisting of companies and individuals. Often partnerships may include company partners for reasons unrelated to tax, but in some cases the company partner is used to minimise the overall tax paid on the partnership profits. Therefore, the Mixed Member rules were implemented through the Finance Act 2014 to counter such arrangements. In March 2014 the supporting technical note was published, the contents of which are coverered in the following pages.