1.1.P.40 Partnership

Definition

For the purposes of income and assets assessment, a partnership is the relationship that exists between people carrying on business in common, with a view to making a profit. A partnership agreement may be oral or written.

It is important to note that FTB is not assets tested.

The business may be run:

• in the owners' name(s), or
• under a registered business name.

The business is not a separate legal entity, which means that although the partnership lodges a tax return, the profit or income is assessable in the hands of the individual partners.

Each partner:

• owns an agreed portion of the business assets,
• receives an agreed portion of the profits, and
• is 'jointly and severally' liable for all business debts (i.e. if one partner defaults, the other(s) are liable for all the business debts).

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Last reviewed: 6 April 2009