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Property partnership or joint ownership?

A fundamental point in the context of property partnerships is whether the business really is a partnership, or falls short as the joint letting of property.

Joint ownership of property alone does not mean that the letting activity will constitute a partnership. Instead, this will depend more on whether the letting itself is carried on in partnership. In fact, general law partnerships are not partnerships if all they do is carry out investment activities, as one of the definitions of being in partnership is that the partners are in business together. Therefore, it will often automatically be the case that joint property ownership arrangements fall short of the degree of business involvement needed to be regarded as in partnership.

Normally, simple joint ownership will not be treated as a partnership and the taxpayer’s share of the income and expenditure from the jointly owned property will simply be included as part of their personal rental business. Indeed, it can often be beneficial to treat the income as arising outside