Where adjustments have been made under ¶289-645 or ¶289-675 for tax purposes, the taxable profits will have been allocated in a way which differs from the way the partners have actually shared profits for a period of account. Thus amounts that have actually been received by the company or trust partner have been taxed on the individual partner.

If that individual then extracted profits from their company, this would probably be charged to income tax as a distribution from the company. There are, however, provisions in place to prevent such double taxation (ITTOIA 2005, s. 850E).

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