Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Business Income Manual

Business Income Manual: Computing the amount to assess: Mixed Membership Partnerships: Excess profit allocation: Who is a non-individual partner?

ITTOIA/S850C (6)

A non-individual partner is simply anyone other than an individual.

The term non-individual partner includes companies and individuals acting as trustees.

Assets held on trust

The fact that one partner holds assets on trust for the partnership as a whole (for example, an individual member of the partnership holds leasehold land on trust for the partnership) does not make it a mixed membership partnership.

Alternative Investment Fund Managers (AIFM)

An AIFM firm is a partnership the business of which is managing one or more AIFs or which carries out the function of managing AIFs as a delegate.  As part of EU-wide strategy for investor protection, AIFM firms are required to subject part of the “remuneration” of key individuals to performance conditions and to defer when those individuals can access that remuneration.

A member of an AIFM firm (including an LLP), is chargeable on the profits of the partnership as they arise rather than when they are received.

The AIFM tax provisions allow the AIFM partnership to elect to be treated as a partner in itself in order to pay tax on a member’s remuneration on behalf of the member.

If it does so, the AIFM firm is treated as an individual member of the partnership, not as a non-individual member for the purposes of the mixed membership rules.

For further information on how the excess profit allocation rules interact with the AIFM deferral arrangements, see BIM82825.