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HMRC internal manual

Employment Status Manual

Salaried members: Anti-Avoidance: Connected party finance


The TAAR may apply if the loan comes from the firm itself, a party connected to the firm, or another member of the firm.

The LLP is a flexible business model, so whether the parties are connected needs to be based on a realistic view of the facts of that case.



This example looks at where a party connected to the LLP provides a loan

The USO LLC operates in the UK through UKB LLP. Individual T is appointed a member of the UKB LLP. It is agreed that T will introduce a sum as capital.

USO LLC provides a loan to T to enable him to contribute the agreed sum of capital.

In this example, the parent body of the LLP provides a loan to an individual which they then introduce as capital. On the facts the TAAR will apply.