This guidance note looks at whether a partnership exists, which is partly determined by legislation found in the Partnership Act 1890 and also by the significant volume of case law provided by the courts.

Not all business arrangements between individuals or companies are partnerships; some can be joint ventures which quite often just involve cooperation on a specific project. Similarly, the letting of jointly held property usually does not have enough business organisation to constitute a partnership, see the Taxation of property income for individuals guidance note.

It is also not uncommon to find that people have been trading in partnership without realising it. Care is thus needed, as the special tax rules which apply to partnerships can give unexpected results, particularly where losses are concerned. See the Relief for partnership losses guidance note.

The definition of a partnership is ‘the relation which subsists between persons carrying on a business in common with a view of profit’, and indications that this definition is met would include the following:

1. •

   a relationship between the parties, possibly