Allocation of Rental Losses for LLP members

[S_JAC]

Can rental losses in an LLP be allocated to individual Members and used against rental profits in their individual property businesses?

Is the LLP tax transparent for an investment business?

[pawncob]

Losses appear to be personal just as in a partnership, so you can claim them.

http://www.legislation.gov.uk/ukpga/2000/12/section/10

[AvocadoK]

On the other hand, if you look iat HMRC's property manual at PIM4025 you will read:

Losses made in one rental business can’t be carried across to any other rental business the taxpayer carries on at the same time in a different legal capacity.

http://www.hmrc.gov.uk/manuals/pimmanual/PIM4205.htm

As the personal rental business is carried on in a different legal capacity to the LLP, the offset is not available. I don't know if I am entirely convinced, but I know that HMRC do take the point in practice.

[section 44]

No.

Even though partnerships and LLPs are generally transparent for tax purposes, the property letting business would be the LLP's and not the member's.