Partner leaving LLP - tax?

Semantic

Hi all,

I recently joined an LLP as a partner but unfortunately things aren't working out and I will be moving on. We are currently negotiating a settlement amount and I was wondering if there was any provision for a tax free amount as with the £30k severance allowance, or is that for employees only?

Thanks,

Semantic

laticsforlife

The £30,000 S401 (hmmm) 'allowance' as you call it, is an employee thing. And it's not an allowance, it's a threshold, but SHOULD only apply if the payment is NOT by way of a sum that would ordinarily be wages.

It's often argued over by HMRC and the Accountancy profession, over whether the payment is derived from the employement (you can see S402 ITEPA 2003 for some definitions)

HMRC website has a whole section in the EIM that you can peruse. 13000 is where the S401 starts

http://www.hmrc.gov.uk/manuals/eimanual/eim12800.htm


Your settlement will likely be as a partner though, so S401 ITEPA 2003 would not apply