Offsetting losses for a limited liability partnership
Jan 16 2008
For tax purposes Limited Liability Partnerships (LLPs) are treated as ordinary partnerships. The tax liabilities are the individual's and each partner has to complete a Partnership section of their individual Tax Return.
In addition the Partnership must complete a Partnership Tax Return, the purpose of which is to show how the profits of the partnership are divided between the partners. Any loss in the LLP will be divided between them and they can offset the loss against other income in the same way that an individual can use losses from a sole trader business.
However, when the partnership tax return shows that it is making a profit, the partners will be required to make payments on account in the same way as sole traders.