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).
Last reviewed: 11 May 2015