Partnerships, including LLPs, are transparent. However, for UK income tax purposes, a partnership is assessed to trading profits on the partnership and assessed separately from any other tax chargeable to the partners. Partners who are UK resident, ordinarily resident and domiciled in the UK are subject to income tax on worldwide income and gains, whether or not received in the UK. Non-resident individuals are only taxable on UK source income, subject to the provisions of an applicable tax treaty.
Whether or not a partnership qualifies for treaty benefits will depend on the definition of a “person” in the treaty. Treaties entered into by the UK frequently define a person as “an individual, a company and any other body of persons” although there are some treaties which specifically exclude partnership from the definition.