Jersey To Update Limited Partnership Laws

by Jason Gorringe, Tax-News.com, London

27 June 2006

The Jersey authorities have published new proposals which will amend the jurisdiction's Limited Partnership Law, in an effort to improve the competitiveness of the island's offshore financial services industry.

The Limited Partnership Law is one of the key pieces of legislation utilised by the finance industry, particularly by the funds sector, and the use of these vehicles has increased significantly in recent years. Accordingly, the Jersey government has flagged up the importance of ensuring that there are "no barriers in the way of the continued success of this vehicle".

Finance industry practitioners have indicated that changes to certain aspects of the Law are needed as soon as possible in order to ensure that the Island remains competitive in this area.

One of the main aims of the proposals is to allow a Jersey limited partnership to have a legal 'personality', bringing the island into line with Guernsey, which amended its relevant legislation in 2001 allowing limited partnerships to elect to have legal identity.

"We wish to achieve the same here," the government's position paper noted. "One key benefit of a limited partnership having separate legal identity is that it affords the limited partners a different tax treatment compared to a 'traditional' limited partnership," the paper explained.

Due to the specialised nature of the law and the desire to bring forward legislative change as soon as possible, the government has decided not to put the proposals to a formal public consultation, and will instead bring the proposed changes to the attention of those likely to be affected by them through a position paper.

The government is aiming to place the amended legislation before the States in autumn 2006.

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