UK partnership with Irish income

Dr. Pseudonym

Hi all,

Just a quick one - if a UK partnership, registered with HMRC for tax purposes, earns Irish rental income, does it need to also register as a partnership with the Revenue Commission in Ireland? Even if both partners are not Irish resident?

Thanks.

Alan Shore

The rental income from Irish Rental property is subject to tax in Ireland. A Form 11 should be filed in relation to the Irish rental income.

Dr. Pseudonym

Thanks for that Alan. But my question more stems from coming across this "Form TR1(FT) - Registration for Income Taxes for Non-Resident Partnerships"...
Is it not enough that the partners register for self-assessment and file form 11? Must the partnership register too? Seems like admin overkill!

Thanks.

Alan Shore

Do you need a registration number?

As non resident landlords the tenant should withhold 20% of the rent if you (the owners) have not appointed an agent. A registration number will be required for the owners for this purpose.

If theres VAT involved the owners will need a VAT number.

Dr. Pseudonym

Oh I see, thanks. So registering as a foreign partnership provides this number. And would you know if registering the partnership automatically registers the non-resident partners for Irish tax, or must that be done separately?

In the UK, where the partners are resident, the business will actually be run through a Limited Liability Partnership with foreign property rental income - not sure if that's of any consequence to Irish taxes.

Many thanks.

Marcusm

Dr. Pseudonym wrote: »

Oh I see, thanks. So registering as a foreign partnership provides this number. And would you know if registering the partnership automatically registers the non-resident partners for Irish tax, or must that be done separately?

In the UK, where the partners are resident, the business will actually be run through a Limited Liability Partnership with foreign property rental income - not sure if that's of any consequence to Irish taxes.

Many thanks.

A UK LLP is actually not a "partnership" in the true legal sense and special provisions had to be included in the Taxes Acts in the UK for the tax treatment of LLPs to mirror that of partnerships.

As an LLP has the ability to own property and incur liabilities in its own right and to sue and be sued in its own name an LLP is technically a body corporate (similar to a company). The deeming of LLPs to be partnerships in the UK was necessary to preserve the status quo ante position of professional partnerships (Accountancy firms, solicitors etc) for whom the LLP legislation was principally introduced (to avoid them reregistering in Jersey).

I do not believe that any specific provisions have been introduced in Ireland to deem a UK LLP to have the same tax treatment as a partnership. Accordingly, a UK LLP receiving Irish rental income is assessable in its own right meaning that a single return is all that should be required. The UK will permit the members of the LLP a credit for the Irish income tax (not corporation tax) on a pro rata basis to the member's share of the assessable income, for tax purposes, of the LLP's income.

It's a bit of an odd one but have obtained numerous opinions from magic circle firms (backed up by QC opinion) on the true nature of such LLPs outside the deeming world of the UK tax system.

Alan Shore

@marcusm, that is very interesting, you learn something new everyday.