UK reviews Scottish limited partnerships amid abuse allegations

The law governing Scottish limited partnerships (SLPs) is under review following media reports suggesting that many of them may be used as vehicles for money laundering, tax evasion, and organised crime.

SLPs have long been “sold off-the-peg as zero-tax offshore companies in the former Soviet Union,” Scottish newspaper The Herald reported January 2. “But now a whole raft of adverts have appeared in English, French, Spanish, Portuguese, and Italian by agencies offering a kind of firm whose owners can pay no tax, remain anonymous, and file no accounts,” the report added, suggesting that agencies think there is a market in Europe and Latin America.

The last five years have seen a significant increase in the number of limited partnerships registered in Scotland rather than elsewhere in the UK. Between 2010 and 2016, the number of SLPs increased by 239 percent, and almost 70 percent of all SLPs were registered in the last five years. The difference may be attributable to an SLP’s legal characteristics, the Department for Business, Energy, and Industrial Strategy noted in a January 16 consultation. Read more:

My news story for Tax Analysts, 24 January (paywall)

BEIS: Review of limited partnership law: call for evidence