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HMRC internal manual

Partnership Manual

Mixed member partnerships and international aspects: summary of filing requirements for partnerships with foreign aspects

This summary is in line with the customer guidance set out in “Helpsheet 380 Partnerships: foreign aspects”. Please note that the principles apply to both individual and company partners, but that additional statements may be required to account for the various permutations that may arise.

Where the partnership consists solely of UK resident partners

The partnership tax return should return the worldwide profits of the partnership, computed as if the partnership itself was a person (individual or company) resident in the UK.

Where the partnership consists solely of non-resident partners

Please refer to the guidance at PM41000 as there are circumstances in which HMRC may agree that no return is required. Otherwise, the return should show only the profits arising from UK operations.

Where the partnership consists of a mix of UK resident and non-resident partners

If the partnership is managed and controlled in the UK, the return will need to include (at least) two separate statements, showing separately the worldwide profits and the UK-only profits.

If the partnership is managed and controlled outside the UK, only the UK profits of the partnership should be returned. Note that, strictly, HMRC has the right to call for an account of worldwide profits where there is at least one UK resident partner liable to tax and reserves the right to do so.

Where a partner becomes or ceases to be UK resident

A partner whose residence status changes during the year is treated as permanently ceasing to carry on the notional trade and starting to carry on another notional trade immediately after the change. Commencement and cessation provisions will apply. The partner will need to use the appropriate partnership statement figures for the two periods, before and after the change of residence.

. The principles set out above apply.

A change of residence status is usually effective from the start of a tax year, but split year treatment by reference to the date of change of residence may be available.