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HMRC internal manual

Employment Status Manual

Salaried Members: Global Structures: Working for the UK LLP

To be a Salaried Member, the individual has to be working for the UK LLP, see ESM60020.

Example 1

This example illustrates a profit share paid to a UK partner by an overseas firm.

ABC LLP is associated with a US partnership ABCUS LLP (formed under the law of Delaware). A B and C are members of ABC LLP and so is ABC US LLP.

A B and C are members of ABC US LLP which also has a further 10 members.

All profits of ABC LLP are paid to ABC US LLP and shared by its members along with the other profits of the firm. A B and C receive a share of the global profits.

A B and C are not Salaried Members as they do not have any income in their capacity of members of ABC LLP. However, ABC LLP is a mixed membership partnership and the mixed membership partnership rules (new sections 850C to 850E) need to be considered.


Example 2

The AA LLP in the UK is linked to AA GP in Australia. A number of people, including C, are members of both firms.

C **is based in Australia. C works full time as a member of AA GP, she does not do any work directly for AA LLP as a member of AA LLP.

*Normally C receives all her reward from AA GP but under the arrangements between the parties she will receives a profit share from AA LLP where AA GP makes insufficient profits. *

In this case, C does not receive her profit share for working for AA LLP; hence she is not a Salaried Member as she does not receive a sum for working for the UK LLP.