DESCRIPTION
A taxpayer earning personal services income from the provision of professional services pays an arranger to organise a partnership with other unrelated taxpayers. 2. The taxpayer pays to the arranger an upfront fee and a continuing management fee. 3. The taxpayer renews existing or enters into new contracts for the provision of personal services in the name of the partnership. 4. Tax invoices for services provided are generally in the name of the partnership. 5. The taxpayer directs the service acquirer to make payments either to the taxpayer as the representative of the partnership or to the arranger as agent for the partnership. 6. If the payment for services are made directly to the taxpayer, that taxpayer pays to the arranger the GST in respect of the provision of the services and the continuing management fee. 7. If the payment for services is made directly to the arranger by the service acquirer the arranger will deduct the applicable GST and the continuing management fee. The net amount is generally paid to the taxpayer who provided the services. 8. The taxpayer's income from the partnership is based on the income generated by the taxpayer's personal services rather than a share of the net income of the partnership income. 9. The taxpayer assigns up to 49% of their alledged interest in the partnership to their spouse or a related party.