Commentary on Sections Overview Overview Section 105: Meaning of “contribution to the firm”
346.This section sets out details of what is included in determining the contribution to the firm. It is based on section 117(3) and (5) of ICTA.
347.There is a change from “contribution to the trade” in the source legislation to “contribution to the firm”. See the overview commentary on this Chapter and Change 16 in Annex 1.
348.The individual’s contribution of capital to the firm is reduced by any amounts drawn out or received back. Subsection (5) provides an exception. The exception is for an amount drawn out or received back which is treated as income chargeable to income tax. This exception is similar to the one in section 111(5), based on section 118ZG(5) of ICTA. See Change 17 in Annex 1.