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Stretching my knowledge,... 05/02/2017, 22380605

  1. Occam Logic

    994 Posts.
    Stretching my knowledge, but here goes. Regardless of whether its an individual, company or partnership, tax is only paid on two conditions being met, income received and capital gains crystalised. So with the $5k 'profit' example, it depends if its in the form of income or capital gain. If it's delivered to a partner as income, it's going to be taxed as your income. Initial $10k capital won't be taxed. If however you make a capital gain and crystalise it, you will trigger personal capital gains tax.

    Just found something interesting. Looks like the inference is that you can have partners outside Australia.
    mce-anchorNon-resident partner

    A partner who is not a resident of Australia is not taxed on the share of net income of the partnership attributable to sources outside Australia. Similar rules apply to temporary residents. If it is believed that any partner who has a share of such income is not an Australian resident, or, is a temporary resident, keep a record of their name and residential address, the basis of any contention and the partner’s share of income derived from sources outside Australia.


    Regarding what option I would do, bit of a tricky one as our circumstances will be different. For example, do either of you have spouses/partners who earn less than you do? I do in which case I would probably use a family trust to invest into the partnership.


    Food for thought!

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