Allocation of Professional Firm Profits

Since the Commissioner withdrew his guidance on how to ensure he will not apply the general anti-avoidance rule in Part IVA to the alienation of these profits in late 2017, we have had to advise our clients without certainty as to how much of the profits they must get from their professional firms directly and how much can be distributed to other entities. Many of us have just continued to apply the pre December 2017 rules to new arrangements without an understanding of what is the Commissioner’s position.

In a recent draft Guideline, the Commissioner has given us an indication of where he is heading with this issue, and in this hour we will be looking at this draft guideline and its interaction with the Commissioner’s recent draft ruling covering the PSI rules.