Income splitting in professional firms – clarity at last?

03 August 2015 Topics: Tax and revenue, Professional advisers, Tax disputes

Many professional practices are structured in a manner that allows the distribution of the professional practice’s income to non-practitioners. On 8 October 2014, the Commissioner released his guidelines on allocation of profits within professional firms for those practices wanting to avoid the risk of the application of Part IVA.

The Guidelines were withdrawn on 14 December 2017 with no replacement guidelines released as at early July 2019.

This raises questions about how the distribution of a professional practice’s income to non-practitioners should be treated, and the continued relevance of the Guidelines in assessing Part IVA risk. Fletch discusses these issues in the paper below.


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