What amount is Ian liable to income tax on as a partner in a dental practice?

Ian's liability to income tax as a partner in a dental practice is based on his share of the total partnership profits. In partnership taxation, individuals are taxed on their share of the profits earned by the business, not merely on the amount they withdraw or draw from the partnership. Drawings are simply distributions of profits and do not determine taxable income; they can vary from year to year based on the members' needs or decisions but do not reflect the actual earnings of the partnership.

Therefore, the correct basis for Ian’s tax liability is his share of the total partnership profits, which accurately reflects the income generated by the dental practice during the relevant tax period. This ensures that he is taxed based on the overall financial performance of the partnership rather than the personal amounts he withdraws, which can sometimes include advanced distributions or even borrowed amounts that do not directly correlate with profit.