The Applicant sought a private ruling as to whether he operated a retail shop business in partnership with his ex-wife and filed a tax return claiming 80% of the losses of the partnership. The Respondent issued a private ruling and determined that the Applicant was not operating the business in partnership and amended his assessment. The issue before the AAT was whether the Applicant operated the business in partnership with his ex-wife and, if so, whether he was entitled to claim a net non-primary production distribution and net income or loss at 80%. The Tribunal considered the factors/indicia of a partnership for tax purposes, as set out in Taxation Ruling TR 94/8 Income tax: whether business is carried on in partnership. The Tribunal decided it was not satisfied, on the balance of probabilities, that the business was operated as a partnership. The Tribunal found that, based on the available evidence, the Applicant failed to discharge his onus to establish that the default assessment of his taxable income was excessive.
Florence Chen appeared for the Commissioner of Taxation, instructed by the Australian Taxation Office.
The judgment is published here.