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Where Taxpayers and Advisers Meet

LLP - tax on contribution to legal fees

srewdpartner
Posts:1
Joined:Mon Jan 30, 2017 9:11 pm
LLP - tax on contribution to legal fees

Postby srewdpartner » Mon Jan 30, 2017 9:17 pm

Hi

Any help anyone can give me on this is much appreciated -
I agreed to a Settlement Agreement following a dispute with an LLP of which I was a member/partner, I received a final profit share amount plus a contribution toward my legal fees - clearly distinguished in the Settlement agreement and the later not referred to as Profit Share. The LLP has now filed tax return with the total amount (incl the contribution to legal fees) as my Profit Share allocation. Am I liable therefore for tax on the contribution element? That certainly wasnt the idea :(

Thanks for any thoughts!!

section 44
Posts:4467
Joined:Thu Oct 30, 2008 12:47 pm

Re: LLP - tax on contribution to legal fees

Postby section 44 » Tue Jan 31, 2017 5:57 pm

surely everything that you get out of an LLP is really profit share, irrespective of how you might describe it (assuming that you aren't looking to argue that you weren't really a partner/member)?


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