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HMRC internal manual

Employment Status Manual

Salaried Members: Global Structures: Income from other firms

The profits received by the member of an LLP from their membership of an overseas firm that is part of the Global Structure is taxed separately. How it is taxed depends upon the facts of the case and the nature of the income



Z is a member of XT UK LLP, the UK arm of a global business with its headquarters in the US. Z receives a fixed amount from XT UK LLP. Z also receives a share of the global business’ profits by virtue of being a member of XT US LLP, the US parent entity.

The share of the profits she receives is expected to be more than 20% of the total amount she receives from the global business.

The Salaried Member legislation is applied at the UK LLP level. It considers the role of Z in XT UK LLP, not the global body. Z receives a fixed amount from XT UK LLP, hence she satisfies Condition A.

The amount Z receives from XT US LLP is not taken into account in deciding whether or not she is a Salaried Member.

How Z is taxed depends upon the facts of the case. The status of Z in XT US LLP is decided under the partnership test at BIM82005TPF