partnership entity

Discussion in 'Accounting & Tax' started by Dylan33, 6th Aug, 2019.

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  1. Dylan33

    Dylan33 Well-Known Member

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    Hi. im in the process of applying for another abn as my main one is registered for GST and my newer business will be under the threshold. So the original one is a sole trader and Im applying for a partnership one with my wife as partner for the new business to get around paying GST.
    My questions are: Do I have to apply for a seperate TFN for the new partnership or can I use mine? And is my wife classed as an associate as asked on the application form?

    Are there any pit falls I should be aware of when using a partnership this way?

    Cheers. Dylan.
     
    Dylan33, 6th Aug, 2019
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  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    This is likely an avoidance concern. This doesnt "get around" the GST liability facing an enterprise. Other aspects of the arrangement need to be considered. You could face arrears and penalties. I havent addressed some of your other questions since it may assist you to seek personal advice.

    A partnership isnt an entity. Its a relationship
     
    Paul@PAS, 6th Aug, 2019
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  3. Dylan33

    Dylan33 Well-Known Member

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    Thanks. im not avoiding tax as the new business will be under the tax threshold for some time.
    The original abn is used for uber. ( earnings well under the threshold ) and I think its unjust to be forced to pay GST on the new business because Im forced to pay Ubers GST.
     
    Dylan33, 6th Aug, 2019
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  4. Mike A

    Mike A Well-Known Member

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    you will need to apply for a new TFN for the partnership
     
    Mike A, 6th Aug, 2019
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  5. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Taxi services require GST registration by law. Otherwise the turnover threshold must be considered for the other activity. A different activity may be best operated under a different taxpayer entity eg company, partnership and provided they are different activities. Aggregation may not be a concern as a scheme to bypass the turnover test.

    Uber income has no turnover test. GST registration in mandatory as a taxi service. A new branch registration may be one way. Uber likely meets the tests.
     
    Paul@PAS, 6th Aug, 2019
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  6. Dylan33

    Dylan33 Well-Known Member

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    I have a branch registration set up but according to the tax department who deals with that "a branch isn't used for that purpose" that's why Im applying for a new entity? Are you saying a branch can be used for that purpose?
     
    Dylan33, 6th Aug, 2019
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  7. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I'm not sure individuals can. Not a entity. Only for a "business entity". In any event all the turnover counts to threshold.

    The nature of the type of income needs to be considered to use any tax law entity. If it was personal service income for example a partnership isnt valid. If its ride sharing etc.... ie Ola. A range of issues
     
    Paul@PAS, 6th Aug, 2019
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