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HMRC internal manual

Partnership Manual

Mixed member partnerships and international aspects: tax status of overseas partnerships

As per the guidance at PM10700, partnerships established or incorporated under the laws of the UK are transparent for UK tax purposes. You should be aware that partnerships established under the laws of another country, however, may not be transparent for UK tax. Although the entity may be described as a partnership in the other country, its characteristics may be dissimilar to those of UK partnerships and, as such, different tax treatment may apply.

There is detailed guidance at INTM180000 to help you consider the classification of a foreign entity, i.e. whether it is either opaque or transparent, for UK tax purposes. A list of foreign entities for which HMRC has expressed a general view on the question of transparency/opacity is set out in INTM180030. Please be aware that the list does come with some caveats. In some instances, the view was given many years ago and there may have been subsequent changes to the foreign law affecting the classification. The entity’s internal constitution, i.e. agreements, articles of association or other documents governing its creation, continued existence and management, can also affect the classification.