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The partnership profits and losses for an accounts period are allocated to the partners according to the profit sharing arrangements for the relevant accounting period¹.

The calculation of the profit or loss to be allocated depends on the status of the partner. Where the partner is an individual or trustee resident in the UK, the calculation is of the profit computed on income tax rules; where the partner is a company, the calculation is of the profit computed on corporation tax rules, and where the partner is non-resident, the calculation is of the profit arising in the UK (see B7.401).

Note that the allocation of profit or loss between partners must result in a straight apportionment of the actual profit or loss made by the partnership. If there is a mixed apportionment such that some partners are profitable and other are loss making, the special computational rules for mixed notional profits and losses apply; see B7.503.

For individual partners, prior to the basis period reforms which come into effect in 2024/25, the trading profit or