Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

Budget 2014: HMRC partnership crackdown to go ahead

Budget 2014: HMRC partnership crackdown to go ahead

The government has confirmed that HMRC will continue its crackdown on partnership structures that mis-use employment relationships to pay less tax.

In spite of criticism from the asset management and wealth management sectors - where boutiques have tended to adopt the limited liability partnership (LLP) structure - the Treasury confirmed that from April 2014 it will introduce legislation to make sure partnerships are not disguising employment relationships within this type of structure. 

The legislation will also aim to prevent the tax-motivated allocation of business profits to corporate partners, which are generally taxed at lower rates than individuals.

The New City Initiative (NCI), a think tank representing fund and wealth management boutiques, has warned that these proposals could spark a trend of LLPs moving to incorporate and found that half of its members are considering incorporating as a result.

The proposed tax changes will mean some partners:

- are identified as employees for tax purposes unless they can demonstrate they have significant decision-making powers within the firm;

- are subject personally to the equity and capital risk of the firm; and

- have their own remuneration tied to the profitability of the business.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Brewin's Gutteridge: Yuan direction

Brewin's Gutteridge: Yuan direction

This week Brewin Dolphin's research head chats to Fidelity Asian Investment Directors Jenny Lee and Gary Monaghan about the big changes in China.

Play On the Road Challenge: horsing around on the polo pitch

On the Road Challenge: horsing around on the polo pitch

Libby Ashby takes to the polo pitch with Stuart Leigh-Davies from Redmayne-Bentley for an 'On the Road' challenge.

Brewin's Gutteridge: where Miton's Godber sees value

Brewin's Gutteridge: where Miton's Godber sees value

This week Brewin Dolphin's research head talks to George Godber, co-lead fund manager of the Miton UK Value Opportunities fund, about value investing.

Your Business: Cover Star Club

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Rathbones’ Glasgow office has only been open for three months but the team, led by Angus Kerr, has already attracted new clients

Wealth Manager on Twitter