Sword Services Ltd v HMRC [2016] EWHC 1473 (Admin)
Citation:Sword Services Ltd v HMRC [2016] EWHC 1473 (Admin)
Rule of thumb: What is legal the nature of an LLP? It is a hybrid between a partnership & a company and has legal features of both of these types of organisation – the internal running of them more resembles the running of a partnership & their relations with third parties resemble a company.
Judgment:
Cranston J ‘In ordinary parlance the terms “partnership” and “partners” cover both general and limited liability partnerships and their members. There is no reason that this should not be the case with Schedule 32 of the Finance Act 2014, not least with the introductory words of paragraph 3. Certainly limited liability partnerships take corporate form. However, the default terms for their internal affairs are taken from the Partnership Act 1890 (Limited Liability Partnerships Regulations 2001, 2001 SI No 1090, reg. 7) and they are probably best regarded as having a hybrid legal character. Crucially, whatever the legal character of limited liability partnerships, this cannot be determinative when considering the meaning that the words of Schedule 32 convey. That would be a return to the formalism deprecated in the Barclays Mercantile Business Finance Ltd, McGuckian and Ramsay cases”, Cranston J
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