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S850C(2)(b), (3)(c)(ii) and (9) ITTOIA 2005

The excess profit allocation rules only apply where it is reasonable to suppose that the “relevant tax amount� is lower than it would have been had the profit shares not been diverted from the individual member to a non-individual member.

The relevant tax amount is the tax that would have been payable by:

• the individual on the profit share that they were allocated; and
• the non-individual partner on the profit share, as originally allocated.

The relevant tax amount does not include any potential tax on the potential payment or distribution from the non-individual partner to the individual.