The 100% rule in ChangeGPS Professional Firm Profits applies when the Individual Professional Practitioner (IPP) receives 100% of the firm's net income directly as personal income — with no associated entities (companies, trusts, or other individuals) receiving any portion of the firm's profits. When the 100% rule applies, the arrangement is automatically classified as GREEN under PCG 2021/4 and RAF 2 and RAF 3 are skipped, as there is no profit splitting arrangement to assess. In ChangeGPS PFP, the 100% rule is detected automatically in Step 4 (RAF 1) when you enter the IPP's direct income as equal to the total firm net income. This is the simplest and lowest-risk structure for a professional firm and requires the least documentation.
What is the 100% rule in Professional Firm Profits and when does it apply?
Understand the 100% rule under PCG 2021/4, including when an IPP receives all firm income directly and no profit splitting applies.