EIM02502 - Employment income: directors바카라 사이트� fees received by partnerships: exemption from charge to income tax under Part 2 of ITEPA: conditions to be met: payment must be insubstantial
EIM02501 sets out the conditions that must be met for directors바카라 사이트� fees paid to a member of a partnership to be exempt from charge to income tax under Part 2 of ITEPA and charged instead as receipts of the partnership.
One of those conditions is that the amount of the payment made to the director by the company with which he is employed as a director is insubstantial compared with the total amount brought into account as receipts when calculating the firm바카라 사이트檚 profits.
Where this treatment was allowed by Extra-Statutory Concession A37 for periods up to 5 April 2018, the text of the concession required that 바카라 사이트渢he fees are only a small part of the profits바카라 사이트�. The change in terminology from 바카라 사이트渟mall바카라 사이트� to 바카라 사이트渋nsubstantial바카라 사이트� does not signal any change in the way in which HMRC will respond to requests for this treatment or any narrowing of the scope of the condition. The term 바카라 사이트渋nsubstantial바카라 사이트� is already used in corresponding National Insurance legislation and has been adopted in tax legislation for consistency.
The requirement therefore remains that the payment received is small when it is compared to the total amount brought into account as receipts. For example, a partner in a firm bringing a total of 拢120,000 into account who receives a payment of 拢5,000 from separate employment as a director may be able to meet this condition, so that the payment is charged as a receipt of the partnership (if the other conditions in EIM02501 are met).