Partnerships pays partners in Capital Gains

Antoinnette
Antoinnette Registered Posts: 118 Beyond epic contributor 🧙‍♂️
in General accounting discussion
Hi everyone,
I have got an enquiry from a potential client who is a partner at a Venture Capitalist firm. He is not an invstor partner just an administrative partner so has not invested any money in the Partnership. However she has been told by the firm to declare the drawings she receives as a capital gain and to only pay capital gains tax on it. Is anyone familiar with this set up?

Comments

  • T.C.
    T.C. Registered, Tutor Posts: 1,448 Beyond epic contributor 🧙‍♂️
    Doesn't make any sense to me!
  • Antoinnette
    Antoinnette Registered Posts: 118 Beyond epic contributor 🧙‍♂️
    Weird I know....but legal apparently

    Well I have been reading about it and apparently Venture Capitalist Trusts can do this. The recipients of income from them can also get Income Tax relief on the amounts they earn. HMRC says this http://www.hmrc.gov.uk/guidance/vct.htm#2
    It sounds like they give the employees shares in the company and the income is considered a gain n the disposal of shares. I intend to call HMRC and get some info on it for research purposes but at the moment its not a scheme I am familiar with so I am going to turn it down. Not worth the hussle and totally beyong my capabilities:001_tt2:

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