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The use of corporate entities alongside individuals as partners in partnership or LLP structures has become increasingly common. This is particularly true following the divergence between corporation tax and income tax rates.

Planning opportunities arise in the context of both structuring new ventures and restructuring existing arrangements, although restructuring can be more difficult given the amount of anti-avoidance arrangements.

In all cases, it will be necessary to justify any planning arrangements from a commercial perspective. In this respect, businesses should consider structuring as early as possible when considering a new business venture.

Targeted anti-avoidance rules apply to partnerships with mixed memberships, ie both individual and corporate partners. These rules aim to counteract situations where excessive amounts of profit are allocated to corporate members or excessive losses are allocated to individual partners.

See the Partnership anti-avoidance provisions guidance note for further details.