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.