The basis of allocation is the commercial profit sharing arrangements that are in force during the period of account (ITTOIA 2005, s. 850).

Although ITTOIA 2005, s. 850 refers to ‘profits or losses of the trade’, it is extended to include profits or losses of a profession or business that is not a trade (so includes investment business) by ITTOIA 2005, s. 847.

For returns made for the 2018–19 tax year onwards, this is subject to the requirement that the amounts of profits and losses allocated to partners in a partnership return are considered final for tax purposes.

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