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Chapter PM132200

Document Cited authorities 2 Cited in Related
Vincent
Published date10 April 2016
Record NumberPM132200
CourtHM Revenue & Customs
IssuerHM Revenue & Customs

The test to be applied is that at S1(1) Partnership Act 1890:

’Partnership is the relation which subsists between persons carrying on a business in common with a view of profit.’

In the case of Tiffin v Lester Aldridge LLP [2012] EWCA Civ 35 the Court of Appeal said that in looking at whether someone was a partner, it was important to look at the intention of the parties.

Although some factors are seen as being indications that someone is, or is not a partner, their importance will vary depending on the facts of the case. In the case of Williamson & Soden v JJ Briars [2011] UKEAT/0611/10/DM, Briars received a share of the profits: although this is often an indication of being a partner, in this case it was outweighed by other facts and he was held to be an employee.

A loan advanced to a business on terms that the rate of interest is to vary according to the profits does not of itself make the lender a partner in the business, provided that the loan agreement is in writing and signed by the parties concerned. A contract for remuneration varying according to the profits does not of itself make the servant or agent a partner in the business. As regards salaried partners you should refer to PM132100.

In applying the test of whether someone is carrying on a business in...

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