Using a UK company as a corporate partner to avoid UK tax

One way of using a limited company to reduce tax is as the managing partner in a limited liability partnership. Partnerships are transparent for tax purposes. Therefore where a partner is non-resident and the partnership income has a non-UK source, the partner has no UK tax liability. Typically, the UK company will be a form of nominee and be entitled to only a small share of the profits under the profit sharing agreements. Most of the income will go to the overseas partners. Customers, will however, deal with the UK partner, and may by so doing be able to circumvent blacklist and other problems. Note that unlike a company the tax liability is not usually affected by the "management and control" of the business. Therefore if the partners want to have partnership meetings in London and take decisions there about the management and control of the partnership business, they can do so. They would though need to ensure that there was no UK trade (otherwise the profits would be subject to UK tax).