Income Tax (Trading and Other Income) Act 2005 section 847

General provisions

Section 847 sets out the general definitions and scope of the partnership rules in Part 9 of the Act, including who counts as a "firm", how the rules extend beyond trades, and the concept of an "indirect partner".

• Persons carrying on a trade in partnership are collectively referred to as a "firm"
• The partnership rules apply not only to trades but also to professions and, for certain key sections, to businesses that are neither trades nor professions
• When the rules are applied to non-trade businesses, references to "trade" become "business" and "profits of a trade" becomes "income arising from a business"
• A person is an "indirect partner" in an underlying partnership if they are a partner in another partnership that is itself a partner (or indirect partner) in that underlying partnership