Will new LLP tax rules sound death knell for small investment managers?

NEWS ANALYSIS

Laura Dew
clock • 6 min read

Firms challenge new tax legislation that will threaten existence of wealth managers structured as LLPs.

Investment managers and wealth managers are challenging new government tax rules on LLPs as they feel they are being punished because a small number of firms are using the structure to avoid tax. Many boutiques and larger investment management firms are formed as limited liability partnerships (LLPs) and there are now more than 800 within investment management, up from 325 before the financial crisis.   An LLP is a corporate body that is regarded as transparent for tax purposes and therefore pays no corporation tax or capital gains tax. Instead, each partner is assessed on their share...

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