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.
- 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).