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This note provides an overview of the legal and taxation issues surrounding limited liability partnerships (LLPs). The various advantages and disadvantages of an LLP structure are also considered.

Further detailed guidance on the legal implications and specific taxation position can be found in the following guidance notes:

1. •

   How to set up an LLP

2. •

   Legal implications of LLP membership

3. •

   Salaried members of LLPs

4. •

   Transfer of a partnership to an LLP

Articles giving more insight and practical experience of the tax treatment of LLPs are listed at the bottom on this guidance note under ‘Links to articles ― LLPs’.

The rules relating to the calculation and allocation of LLP partnership income and gains are essentially the same as for general partnerships. These are therefore detailed in the Trading profits of a partnership and Capital gains of a partnership guidance notes. For information on the taxation treatment of LLPs, see below.

One main difference in the taxation of LLPs are the salaried members rules where individual