What Is a Scottish LP
A Scottish Limited Partnership (SLP) is a special legal form under UK law. It has historically been used for international holding and investment structures due to its tax-transparent characteristics.
Tax System
| Type | Rate |
|---|---|
| LP corporate tax (no UK income) | 0% at partnership level |
| Partners' tax (UK-resident partners) | country of residence rate |
| VAT | 20% (if registered) |
Important: An SLP is tax-transparent โ tax is paid by the partners, not the partnership itself. If partners are non-UK residents with no UK-sourced income, no UK tax arises.
Structure
- General Partner (GP) โ manages the LP, has unlimited liability. Usually a company (UK Ltd or foreign)
- Limited Partner (LP) โ investor with limited liability
- Minimum 2 partners required
- Registered at Companies House (Scotland)
Who It Is For
- Holding structures with non-resident partners
- Investment funds and private equity
- International tax planning structures
Cost & Timeline
| Item | Amount |
|---|---|
| SLP registration | ยฃ20โ500 |
| Annual maintenance | from ยฃ500/yr |
| GP company (if needed) | ยฃ100โ300 |
| Registration time | 1โ3 business days |
Pros & Cons
Pros:
- Unique transparent structure โ tax at partner level
- 0% corporate tax with no UK income
- Part of UK legal system โ high reputation
- Fast registration
Cons:
- Only suitable for holding and investment structures
- Complex compliance and legal setup
- Annual Confirmation Statement required at Companies House
- Banks are cautious โ clear ownership structure required
FAQ
How does a Scottish LP differ from a UK Ltd?
A UK Ltd pays 19โ25% corporate tax. An SLP is tax-transparent โ partners pay tax. With non-resident partners and no UK income, the effective rate is 0%.
What is an SLP most commonly used for?
Holding structures: the SLP owns shares in foreign companies or assets. Dividends flow through the partnership to partners without UK tax.