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Income from property, partnerships and planning
Published on 01 Oct 17 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
Companies and trusts are common vehicles used to carry on business in Australia, and the clarity of taxation law for these structures provides certainty to business operators. However, the ambiguity and uncertainty surrounding the taxation of partnerships can mean that operating a business as a partnership is problematic. The conflicting case law and ATO commentary on income from personal exertion, personal services income and income from property of the partnership can lead to issues when structuring businesses in partnerships. This article discusses the recent legal history surrounding these ambiguities and what considerations should be kept in mind when operating businesses through partnerships. The article examines income from personal exertion and income from property, personal services income, the leading cases, the ATO focus on income earned in partnerships, structuring and restructuring partnership interests, professional standards and regulations,
“no goodwill” partnerships, and the ATO view on alienation of income through discretionary trusts.
Author profile
John Ioannou CTA
John Ioannou, CTA was admitted as a Solicitor in 2002, is a Principal Lawyer at Macpherson Kelley and leads the national tax practice. He has experience in the areas of tax structuring, tax disputes and commercial transactions. John has a Bachelor of Arts, Bachelor of Laws and a Masters of Law. John is currently serving as the QLD representative on the Tax Institute's National Council. - Current at 15 December 2025
The Tax Institute is Australia's leading professional association and educator in tax providing the best resources, professional development and networks.