Splitting profit between partners
In a partnership each partner is taxed on their own share, so the split changes the tax you pay between you. See the tax on your split and the split that pays least.
Your answer
Enter the partnership profit to see the tax on each partner's share.
About this calculator
For two people running a business together as an ordinary partnership: spouses, family or friends. It shows each partner's income tax and Class 4 National Insurance on their share, and which split would pay least tax between you.
The split isn't something you pick for tax. It must be the one in your partnership agreement and should match what each of you puts in. It isn't for LLPs or partnerships with a company as a partner.
What happens to your answers
We don’t keep them. Your answers go to our server to do the sums and aren’t stored or logged. If you copy a link to your answers, they’re in the link itself, so only share it with people you trust.
How it’s worked out
We share the profit by the split you give us, add each share to that partner's other income, and work out the income tax on the share (the tax with it, less the tax without it) and Class 4 National Insurance on the share. Then we try every split from 0% to 100% in 1% steps and show the cheapest.
The law taxes each partner on the share set by the partnership's profit-sharing arrangements. HMRC can challenge a share given to a spouse or family member who does little or no work and puts no money at risk, and tax it on the partner who gave it away (the settlements rules). A partner whose money was really at risk in the business is in a stronger position.
The special rules for partnerships with a company as a partner (mixed membership partnerships) don't apply to two individuals, so they're left out.
Worked example
Splitting 26:74 instead of 50:50 would cut your tax by about £2,411 a year, if your agreement and the work you each do support it.
2026/27 tax year · England · two individual partners · other income taxed like pay · no partner salaries or interest on capital · splits tried in 1% steps
| Partnership profit for the year | £80,000 |
|---|---|
| Your 50:50 split: partner A's share | £40,000 |
| Your 50:50 split: partner A's income tax on the share, on top of £30,000 other income | £11,946 |
| Your 50:50 split: partner A's Class 4 National Insurance on the share | £1,646 |
| Your 50:50 split: partner B's share | £40,000 |
| Your 50:50 split: partner B's income tax on the share, on top of £0 other income | £5,486 |
| Your 50:50 split: partner B's Class 4 National Insurance on the share | £1,646 |
| Tax between you on the 50:50 split | £20,724 |
| Best 26:74 split: partner A's share | £20,800 |
| Best 26:74 split: partner A's income tax on the share, on top of £30,000 other income | £4,266 |
| Best 26:74 split: partner A's Class 4 National Insurance on the share | £494 |
| Best 26:74 split: partner B's share | £59,200 |
| Best 26:74 split: partner B's income tax on the share, on top of £0 other income | £11,112 |
| Best 26:74 split: partner B's Class 4 National Insurance on the share | £2,441 |
| Tax between you on the 26:74 split | £18,312 |
| Saving a year with the best split | £2,411 |
Worked out using HMRC's published rates for the 2026/27 tax year (6 April 2026 to 5 April 2027), on a yearly basis.
Questions people ask
Can we change the split just to save tax?
You can change your agreement, but the split must reflect what each of you really does and puts in. HMRC looks at the arrangements in force during the year, so agree any change in writing before the year starts, not once the profit is known.
My spouse doesn't work in the business. Can they still take a share?
Possibly, if they put real money in at risk. If they put in no money and do no work, HMRC can say the share is a gift of income and tax it on you instead. The Arctic Systems case (Jones v Garnett) shows how these rules work. Talk to us first.
Does a bigger share affect Child Benefit or the £100,000 line?
Yes. A partner's share counts as their income, so it can bring in the Child Benefit tax charge over £60,000 or shrink the tax-free allowance over £100,000. We flag both on the best split.
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