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HMRC internal manual

Employment Status Manual

Salaried members: global structures

This section looks at the position of UK LLPs that form part of structures that cross international boundaries (“global structures”).

The salaried member legislation is applied to the individual as a member of that UK LLP. The legislation applies equally to all individual members, irrespective of their residence, see ESM66005.

The salaried member legislation only applies to those members who work for the UK LLP, see ESM66010.

The salaried member legislation is based on the individual and the UK LLP. It does not take into account:

  • income from other parts of the global structure
  • influence in other parts of the global structure, or
  • capital invested in other parts of the global structure

In the same way, if an individual is found to be a salaried member, then the provisions only apply to their income from the UK LLP.

If the individual also receives income from other part(s) of the global structure then this income is taxable as appropriate. For example, as trading income from a foreign partnership, see ESM66030.

As the Disguised Salary test is focused on the UK LLP, it is important that the financial transactions between the UK LLP and other members of the global structure are conducted on an arm’s length basis.

ESM66015 looks at condition A and what is the profit of the UK LLP in a Global Structure

ESM66035 looks at the application of condition B, the test for significant influence, where the UK LLP is a member of a global structure.

Condition C is applied on the basis of capital contributed to the UK LLP and not any other part of the global structure, see ESM66040.