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Will new tax rules spark trend for wealth LLPs to incorporate?
by Danielle Levy on Feb 11, 2014 at 11:02
Charles Scott-Plummer, a director at the firm, said the government should be careful not to kill the partnership structure for tax reasons but should instead appreciate the governance benefits.
‘I think it is sad in many ways because the LLP and partnership structure is a very positive thing for an investment or finance business, how it ties everyone in and makes them responsible,’ he said.
However, Darren Oswick, a corporate tax lawyer at Simmons & Simmons, is not anticipating a wholesale shift to corporate structures. He suggests LLPs grappling with the proposals consider changing the terms of the partnership arrangement, for example, bonus terms or who sits on the management committee.
Perhaps the most important thing LLPs can do is have a plan in place and be prepared to move quickly.
‘Assess all of the options under the current rules, work out what is the least painful set of changes you need to make so that tax does not distort the current business plan,’ Oswick said.
‘And when the tax rules are published in their final form, be prepared to act quickly on the plans you are making now.’
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