The final barrier preventing top UK firms from converting to limited liability part-nership (LLP) status looks set to be over-come, following a move by the French authorities to reform the tax regime.

The French authorities have released a draft consultation paper that indicates that they are prepared to treat UK LLPs as tax transparent. Under the current regime, LLPs risk being subject to double taxation.

The change comes after two years of lobbying of the authorities by major UK firms on the issue.

The consultation is due to end in July with legislation expected later this year, allowing UK firms to convert on 1 May next year without incurring additional costs.

Firms including Linklaters, Lovells, Freshfields Bruckhaus Deringer and Norton Rose were all forced to shelve their plans to convert this May because of the delays to the French tax reforms.

Raymond Cohen, Linklaters' general counsel, said: "If this does have the effect we are expecting, then it is good news as it would remove the last barrier to conversion. Our conversion will probably go to the partner vote during our autumn partner retreat."

However, it is still possible that opposition from French lawyers will block the changes. The lengthy reform timetable also means that those firms that were hoping to convert mid-way through this year will have to wait.

John Young, Lovells' senior partner, said: "There was a possibility that the law may have changed quickly and we would bring it in at the half-year but we are working to May [2007].

"It is helpful if they are having a consultation as it means there is a better chance of getting it right."

Legal Week research has shown that the vast majority of the UK's leading firms are planning to convert to LLP status.