Dundas House
Westfield Park
Edinburgh EH22 3FB
T: 0131 440 5000
F: 0131 440 5001
E: mail@springfords.com
W: www.springfords.com
Limited Liability Partnerships
Q. When is a partnership not a partnership?
A. When it’s a Limited Liability Partnership.
A Limited Liability Partnership (or LLP) isn’t actually a partnership; it’s a body corporate (with all the benefits that brings) but
is taxed as a partnership (with all the benefits
brings). The best of both worlds? Exactly! We’ve converted to an LLP
ourselves, so you can see we’re convinced.
Worryingly high professional indemnity premiums and a climate of increasing claims have encouraged partners in
professional firms to look at ways to reduce risk. An LLP can often be the answer. LLPs offer limited liability for their
members, avoiding potentially catastrophic claims that could wipe out an innocent partner’s personal assets. However, for
tax purposes, members are treated as partners in a partnership – so no double taxation and no nasty NICs on drawings.
What’s more, with care, an existing partnership can convert to an LLP without any unpleasant tax consequences.
So far so good? Of course, there are hoops to jump through. Conversion has to be timed and structured properly. Stamp
duty land tax and VAT require to be considered. The change will need to be notified to customers, staff and suppliers.
Additional disclosure rules will apply to the new corporate body. But worry not,……..
We know from first hand experience what’s needed. With this knowledge, we can help you reach the decision that’s right
for you. If that decision is to convert, we’ll guide you through the process, to ensure that the transition is smooth, timely,
and fully effective for tax purposes. We’ll liaise with your lawyers on the paperwork and make sure that you have everything
under control.
Still unsure? Talk to
Patricia Reekie
John Hume
about how you can get the best of both worlds.