The UK’s Upper Tribunal considers the mixed member partnership rules in the context of an LLP’s incentive arrangements
The Upper Tribunal (“UT”) decision in The Boston Consulting Group UK LLP [2026] UKUT 00025 (TCC), overturning the decision of the First-tier Tribunal (“FTT”) carries a number of significant lessons for the taxation of mixed member partnerships that have operated long term incentive arrangements.
The UK’s mixed member partnership rules
The “mixed member partnership rules” (the “MMRs”) were introduced into UK tax legislation with effect from 6 April 2014, and broadly apply to all partnerships, including limited liability partnerships (“LLPs”), which consist of corporate and individual members. The MMRs were intended by the UK Government to prevent tax from being unfairly avoided through the allocation of taxable profit to a corporate member of a partnership (which would benefit from a lower tax rate of corporation tax), instead of those taxable profits being
