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HMRC guidance on condition C of the LLP salaried member rules

HMRC has agreed to amend its guidance on the application of condition C of the LLP salaried member rules within ITTOIA 2005, ss 863A–863G.

Following discussions with the CIOT regarding the application of the contribution criterion, HMRC has agreed to amend its guidance and in the meantime has released a statement to the CIOT as follows:

1. •

   ‘HMRC’s position remains that the TAAR applies if the main purpose, or one of the main purposes, of the arrangements is to secure that the Salaried Member Rules do not apply

2. •

   in applying this test, HMRC will continue to take into account the policy intention underlying the legislation, which is to provide a series of tests that collectively encapsulate what it means to be operating in a typical partnership

3. •

   in doing so, HMRC would not consider that genuine and long-term restructuring that causes an individual to fail one or more of the conditions to be contrary to this policy aim.

4. •

   in relation to