Remuneration limit for working partners raised, permitting higher deductible partner compensation starting in the next assessment year. The Finance Bill raises the allowable deduction threshold for remuneration to working partners under section 40(b)(v), preserving the two-tier structure ... Summary
Remuneration limit for working partners raised, permitting higher deductible partner compensation starting in the next assessment year.
The Finance Bill raises the allowable deduction threshold for remuneration to working partners under section 40(b)(v), preserving the two-tier structure that gives a more favourable limit on the initial portion of book-profit and a lower ceiling on the balance. The amendment takes effect from 1 April 2025 and applies to assessment year 2025-26 and subsequent years, with deductions permitted only where remuneration is authorised by and accords with the partnership deed.
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