289-370 Changes in the profit-sharing arrangements
Where the profit-sharing arrangements change during the basis period, this is reflected in the allocation for tax purposes (ITTOIA 2005, s. 850).
Ian and Peter have for several years traded in partnership. Their accounts for the year to 31 December 2020 show a profit of £16,000. Profits and losses are shared equally until 31 March 2020. From 1 April, profits and losses are shared in the ratio 7:9.
Profits are allocated in accordance with the profit sharing arrangements in force during the year to 31 December 2020 as follows: