Assessing partnership assets 043-03120060

The customer will need to provide documentation, such as:

• Business Details form (MOD F)
• Personal and partnership income tax returns. If the customer is partnered, their partner's personal income tax return is required if they are also a partner in the business
• Business financial statements, (profit and loss statement, balance sheet and partnership agreement (if one exists))

See Documents required to assess a partnership.

Has the customer provided the required documents to assess the partnership?

• Yes, go to Step 2
• No:
• Request the information verbally or use the Request for Information (RFI) workflow or guided procedure. Allow a reasonable timeframe to respond
• Tell the customer they can lodge their documents online or in person at their local service centre or via the post
• Record details on a DOC. or in a Note
• Procedure ends here

Is the partnership business still operating?

• Yes, go to Step 3
• No, see Business has ceased or has been sold. Procedure ends here

An assessment by a Complex Assessment Officer (CAO) is required where a partnership involves:

• a primary production partnership that has any liabilities
• a trading partnership of more than 2 members
• trading partnerships that hold multiple encumbrances and secured loans
• multiple business activities that do not relate (excluding investment and rental income)

Does the partnership require a CAO assessment?

Note: if the decision to refer to a CAO is not clear, first contact Local Peer Support (LPS).

• Yes, refer the case to a CAO. Procedure ends here pending CAO assessment
• No, go to Step 4

Check if there is any real estate recorded on the balance sheet which belongs to the business?

• Yes, is the real estate the customer's principal home?
• Yes, go to Step 5
• No, assess the real estate
• No, go to Step 5

Adjust the value of any motor vehicles and any plant and equipment, etc. listed on the balance sheet to their current market value. This will be recorded on the customer's Business Detail (BUS) screen in Step 7.

Remove the value of the principal home from the asset section of the partnership balance sheet.

Go to Step 6.

Make sure the partnership is not operating as an investment or share trader, then deduct any shares and managed investments listed on the balance sheet that are not part of the working capital of the business. These are considered as the personal assets of the partners. See assessment of income and assets from sole traders and partnerships.

Remove any liabilities listed on the balance sheet that are wholly or partially non-allowable due to being secured against exempt assets (e.g. the principal home). This will increase the net asset value of the partnership. See Business liabilities or loans and liabilities against assets.

If unsure how to assess the customer's business interests from the information provided, contact LPS. If required, refer the case to a CAO.

Note: when a partnership has multiple business activities that are unrelated, Service Officers must refer the case to a CAO. There is no need to check if the referral is appropriate.

Real Estate

New real estate should only be linked to a business where it is unavoidable. For example a non-primary production business where there is a liability over all business assets (real estate and other) and the value of the net business excluding the real estate are negative. Real estate should not be linked to a business unless advised and assessed by a Complex Assessment Officer (CAO).

• Where real estate is connected to the business, but not linked, the real estate is to be coded on RE screen and reviewed along with the business, but only the Current Market Value is recorded
• Where real estate is linked continue to Real Estate Details (RE) screen for the real estate:
• The estimated value should be the balance sheet value
• The assessable value of the business will be automatically adjusted for the difference between the Estimated Value and Current Market Value recorded here

Financial investments

Code any bank (apart from trading/working account), shares and managed investments on Savings Summary (SVS), Managed Investments Summary (MIS) or Securities and Investments Summary (SIS) screens. The Self-employment workflow cannot be used to update SVS, MIS, or SIS screens.

To record sole trader assets determined, see Assessing and coding the Business details for sole traders and partnerships MOD F.