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A member of a limited liability partnership left after a falling-out and has an unpaid and apparently irrecoverable profit share. Can he declare his actual income on his tax return rather than the share declared by the partnership?
Our client was formerly a member of a limited liability partnership (LLP) on a fixed fee arrangement based solely on his own billings. The firm paid fixed monthly drawings in anticipation of this. I assume that any difference either way would be resolved via his capital account. He was not an equity partner.
He subsequently fell out with the main partner and retired from the LLP after about 21 months. He instigated a law suit (costing him £30 000) to claim unpaid amounts including the tax and National Insurance liabilities that the firm had indemnified him against (in writing).
However the LLP applied for a CVA which was passed before judgment could be reached and his claim has been valued at £1 with no further recourse.
The main partner issued partner pages for three years giving the profit share which is massively in excess of the actual...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.
