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Scottish Limited Partnership: the interest of incorporating in Scotland

ICD Fiduciaries
17 May, 2016

Scotland is a part of the United Kingdom, a leading global business and financial centre and an important jurisdiction for international tax planning. The UK is known worldwide as a jurisdiction with a standard level of taxation; thus it has no image of a "tax haven" for offshore company formation. Meanwhile, the UK law provides for the opportunity to incorporate and use companies with 0 tax rate - LP (Limited Partnership).

A Limited Partnership registration in Scotland offers different advantages than other company formation in the UK. Scottish LPs are considered a legal entity and therefore can hold assets in their own name, as well as having significant tax benefits that distinguish them from the structures available in England & Wales.

How to structure a partnership:

A Scotland LP is a privately owned Limited Partnership with 2 or more individuals or corporate bodies being the Partners/Members of the LP. At least one of the Partners in the LP must be nominated as "General Partner". The Members may be corporate bodies or natural persons from any legal jurisdiction worldwide. The general business partners are thereby responsible for any obligations as previously agreed, as well as any debts that may arise throughout the company’s trading life. The limited partners will only be responsible for the amount they have contributed to the business, however they do not control the business, have any rights with the running of the company, nor are they allowed to take out what they have originally contributed.

Tax regime for a Scottish LP:

Anyone wanting to set up a Limited Partnership in Scotland must bear in mind that Scotland has its own partnership laws and the proceeding is therefore different to elsewhere in the UK. Limited Partnerships are tax transparent because each Partner/ Member is liable for taxes and the Partnership itself. If the Partners of the Scottish LP are tax haven companies (like Seychelles IBCs) they are not taxed on profit in their offshore zones. An official business address in Scotland is necessary when forming an LP, however if this has not been arranged, ICD Fiduciaries services include providing this address for you.

The favorable tax regime of LP companies does not remove the requirements for preparing Financial Statements. Every LP must prepare and keep financial statements, and the relevant Partnership Tax return must be filed annually with HMRC.

Tags: Scotland | England

About the Author

ICD Fiduciaries

ICD Fiduciaries is a consulting firm founded in 2006 in the UK and specializes in creating offshore companies and the opening of offshore bank accounts. www.icd-fiduciaries.com


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