Tax Updates: 11 May 2026

Welcome to this week’s review of tax issues where Richard comments on what’s been happening in the world of tax over the past week. If you have a question or would like a second opinion on any national or international tax issues, please contact Richard via email at [email protected].

Unincorporated bodies and GST

Do you know what the difference is between a partnership versus a joint venture versus a simple co-ownership or cost-sharing arrangement? Because there are specific Goods and Services Tax (GST) rules which apply to some structures and arrangements and not others. If not, then a recently released draft interpretation guideline (IG) from Inland Revenue (IR) titled “GST – Types of unincorporated bodies” could be your next coffee break read (being only 15 pages in length). Note that an IG is not an “interpretation statement” so there’s no discussion of the specific GST rules.

The stated aim of the IG is to provide commentary surrounding the nature of the various types of unincorporated bodies, to assist you with subsequently determining which GST rules apply to the arrangement which you have been asked to consider by your client.

The wording used in the title of the IG, identifies that the focus of the document is related to unincorporated bodies—partnerships, joint ventures, trusts (the common three) and the ‘other’ category which includes the likes of clubs and syndicates.

For GST purposes, an unincorporated body is treated as a separate ‘person,’ and you can find a definition of the term within section two of the Goods and Services Act (GSTA), which provides that it includes a partnership, a joint venture and the trustees of a trust. The use of the word “includes” signalling to you that other arrangements, that do not fit nicely into one of the mentioned previous three, could still be considered an unincorporated body.

Once you think that you are dealing with an unincorporated body, section 57 is fairly clear in its reading, that it is the body and not its individual members that is deemed to be carrying on the taxable activity with the accompanying consequences of the deeming provision. However, in a joint venture scenario where you are satisfied that a partnership does not exist, you do have the option of electing under section 57B that the joint venture is treated as a flow-through. In which case, each member of the joint venture is treated as a separate GST person.

The IG explores each of the three main unincorporated bodies, and when discussing partnerships, highlights the things to look for when determining:

• whether you actually have a partnership for GST purposes,
• whether it may in fact just be a co-ownership of property and nothing more, or;
• whether it may be a joint venture arrangement

In the case of the latter, it could open the door to utilising section 57B if that was desired by the parties to the contractual agreement. In this respect, the IG suggests that joint ventures are fundamentally contractual associations and that they are usually distinguishable from partnerships because they tend to have a finite and confined purpose rather than being formed to conduct a general and ongoing business.

When the arrangement you are presented with looks like it won’t fit any of the more common three options, the IG ends with a discussion surrounding other potential unincorporated bodies and what to consider based on several judicial decisions on the issue.

Finally, I find it quite useful when IR sets out the factors that they will consider when trying to determine the nature of a particular arrangement. This is a prudent starting point for your own investigation, particularly if you have any suspicion that your client may end up under the Revenue’s microscope at some point, then it naturally rests with you to prove that you have taken the right tax position to date.

As with most IR publications of this nature, there are examples throughout to illustrate the content.

The draft IG is referenced PUB00530, with the closing date for any submissions being 17^th June 2026.   

This article was originally published through the ‘A Week In Review’ newsletter. If you would like to receive Richard’s tax updates every Monday morning, you can subscribe here.