Revenue-sharing payments tax implications

Hi, I am entering into a revenue-sharing agreement with a Singapore investor (individual person). The investor agrees to seed my hedge fund to get it up and going in exchange for a % of the firm's revenue. The firm is a UK LLP. Question: 1. Are the revenue-sharing payments deductible operational expenses that can reduce the LLP's taxable income? 2. The investor only provide the seed capital invests into my hedge fund (not into the LLP). The investor would not provide any goods or services to the LLP. Are the revenue-sharing payments subject to VAT? 3. The investor is a Singapore resident person. When making the revenue-sharing payments to the investor, is it subject to withholding tax? Thank you. Regards, CWZ

Hi ,
 

1.  The money paid to your investor would be classed as a dividend and would be treated accordingly.    However, if the investor is sending monmey to your LLP which is then loaned to the Hedge fund to seed it, this would be classed as a loan to a participator and may be chargeable under S455 CTTA2010.  I cannot comment on any VAT implications of the transaction, you should contact the VAT team.  Payments to non UK residents may be subject to withholding tax on any interest  . Thank you .