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HMRC internal manual

Business Income Manual

HM Revenue & Customs
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Partnerships: Limited Liability Partnership (LLP): international aspects

UK branches of overseas LLPs

The tax treatment of a UK branch of an overseas LLP, and the members of such a LLP, depends on how the foreign entity is regarded for the purposes of the UK taxation provisions. Where the foreign LLP is regarded as a ‘body corporate’ for the purposes of the UK Taxes Acts the profits of the UK branch will be chargeable to Corporation Tax. On the other hand if it is regarded as a partnership then members are separately liable to Income Tax on their share of the branch’s profits under the legislation for partnerships. The Limited Liability Partnerships Act 2000 only applies to UK registered LLPs.

Double taxation relief

Where an overseas tax authority regards a foreign branch of a UK LLP as a ‘body corporate’ the UK members will be entitled to claim tax credit relief in respect of their proportionate share of the foreign tax paid on the overseas branch’s profits.


A UK LLP is not itself liable to tax in the UK as the LLP tax provisions identify other persons (i.e. the members) as the persons who are to be taxed. Accordingly for the purposes of the Double Taxation Agreements (DTAs) the LLP is not regarded as being resident in the UK and cannot itself therefore claim relief from foreign taxes under such agreements. As is the case with ordinary and limited partnerships the members must make the claim.

Assuming they are UK residents in accordance with the provisions of the relevant DTA the members of a LLP are entitled to relief for any withholding tax on overseas dividends. Normally a DTA provides for withholding tax of a maximum of 15% to be deducted and relief for that tax given. Where a partner is an individual then no relief is due in respect of the taxes paid (the underlying taxes) on the profits out of which the dividend is paid.

In the very narrow circumstances where the LLP is not treated as transparent, but instead as a body corporate for tax purposes (such as when the LLP is in liquidation or being wound up in circumstances where transparency cannot be retained), we take the view that the LLP can itself claim relief for foreign taxes, including if appropriate underlying tax.