Why UK LP is not "ought" to pay tax on profits?

[a112114]

Hello everyone.

So, I'm thinking about opening a GB LP and can't understand how we‌ can not pay taxes on profits.
The model is to keet profits on accounts of‍ LP and does not widhraw dividends.

The structure that been offered to me is 2⁠ physical person nominees from Cypress as partners and me as UBO.
As I understand if⁤ we don't work with GB clients we don't have to report in the UK and⁣ we are able to provide zero declarations because partners have the right to pay taxes⁢ on their own profits in their country of residence.

But what about the profits of︀ accounts why I don't have to pay taxes on this money? Just because no one︁ can know about this money?

Thanks in advance!

 

[alexnevm]

Why don't you want to use Seychelles entities as nominees?
Simply as hell...

 

[a112114]

Hello, I'm thinking of becoming one of the partners

 

[Alexa QXBC]

LP is︂ not a corporate taxpayer in the UK. In case if the partnership has foreign participants︃ and the company does not carry out activities in the UK (if money on your︄ account generated from other countries then UK), there is no taxation on its territory, and︅ participants must independently fulfill their tax obligations in the country of registration.

LP, consisting of︆ non-resident members, will not be able to obtain a certificate of the status of a︇ UK tax resident and benefit from UK treaties on avoidance of double taxation.

LP is︈ not required to submit financial statements to Companies House, but LPs that do not conduct︉ business in the UK and whose members are outside the country are required to file︊ a zero tax return.

Limited Partner must register for Self Assessment with HM Revenue and︋ Customs (HMRC).
General partner must

• register the business with Companies House
  
• register the business︌ for Self Assessment with HMRC + must also register separately as an individual
  

GOV UK︍ guide Set up and run a limited partnership

 

[manukahoney]

Also good luck opening a bank account for non-res LP.

 

[a112114]

Alexa, thanks for the clarification.
So, If all my counterparties are not UK entities,︆ then there is no tax on profit that I left on the LP bank account,︇ correct?

 

[a112114]

Yeah, this is another question that I have. I've already noticed that this is quite‍ hard to open a bank account for LP. For now, the question is what would⁠ be better to have 2 EU physical nominees or 2 offshore entities (Seashells for example)⁤ with EU directors/shareholders.

 

[a112114]

Moreover, as I understand this is not possible to open a bank account with the‌ structure of two offshore entities, but EMI is possible.

 

[manukahoney]

Everything is possible if you go with private banking or high-risk friendly EMI, but it's‌ either relatively high entrance check or extremely expensive transactions or both.

 

[Alexa QXBC]

Correct, you just need to fill Zero tax declarations. LPs⁠ are treated as transparent for most tax purposes and not liable to pay tax as⁤ a partnership. The activities of the partnership are treated as carried on by the individual⁣ partners, so the individual partners are separately subject to income tax on their share of⁢ the profits or losses of the partnership.

To avoid treating from HRMC your placee of︀ business as the UK one: all contracts with partners must be signed outside of the︁ UK+ partnership assets must be situated outside the United Kingdom and an individual partner is︂ not domiciled in the UK, no charge to inheritance tax arises on his death.

So, when you and your partner will distribute retained earnings into your bank accounts in another︃ jurisdictions, you will oblige to pay taxes there according to your country's of residence tax︄ law.

 

[Poem]

Or do‍ you mean for any UK structure as a non resident? Or only for UK LLP⁠ (why do you say "LP"?), as a non resident also? Well, you've never heard of⁤ Transferwise?

 

[momordica]

Do not want to start a separate thread.
Paraguay tax residents form a UK LLP.‌ The purpose of the partnership is to invest in the stock exchange (mostly in the‍ USA). Is it still tax-free? This is what I read on multiple websites offering LLP⁠ solutions in the UK for non-residents.
"Non-UK residents who do not qualify as UK residence⁤ for taxation purposes and do not earn US-source income, do not have to file self-assessment⁣ and not subject to UK income taxes, however, they are responsible for paying taxation in⁢ the country they reside."
If Paraguay tax resident has a profit generated on the US︀ stock exchange through UK LLP, he has to pay personal income tax in the UK?︁ Do I understand it correctly?

 

[a112114]

LP for limited partnership and LLP for⁠ limited liability partnership. For now, I'm talking about LP.

Yeah, I know about Transferwise, but⁤ these guys let you work for 3 months mostly and then kick you. Tried on⁣ other companies.

 

[Liberta]

Don't forget to get health insurance. it is an overlooked issue.