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HMRC internal manual

Partnership Manual

Private Fund limited partnerships

Following a 2015 consultation on partnership legislation for private equity investments, a Private Fund Limited Partnership (PFLP) was created in April 2017 by legislation which amended the Limited Partnerships Act 1907.

In order to be a PFLP the partnership has to be constituted by an agreement in writing, and be a collective investment scheme. Collective investment scheme has the same meaning as in Part 17 of the Financial Services and Markets Act 2000, ignoring any order made under section 235(5) of that Act.

The amendments to the Limited Partnerships Act 1907 mainly affect the actions which a limited partner in a PFLP can take.   They also remove the requirement for limited partners in a PFLP to contribute capital. Further details are available in the explanatory document to the Legislative Reform Order: http://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/583873/LRO_january_2016_presentation_line.pdf

For tax purposes a PFLP is treated no differently to a Limited Partnership, and the partners in a PFLP are treated no differently from the partners in a Limited Partnership.