ChangeGPS Professional Firm Profits should be run annually for any professional firm client that allocates profits through associated entities. PCG 2021/4 applies on a year-by-year basis, and the ATO expects professional firms to actively review their arrangements each year. The ATO has stated that it will increase compliance activity in this area, particularly for arrangements in the AMBER and RED zones. Running PFP annually ensures that any drift in the profit allocation arrangement — for example, a change in the proportion flowing to a trust or company — is identified early and documented. The best time to run the assessment is before the firm's profit distributions are finalised for the year, so that any necessary adjustments can be made before the distribution is locked in.
How often should a Professional Firm Profits assessment be run?
Understand how often a PFP assessment should be run under PCG 2021/4, including annual review requirements and timing considerations.