Mrs Kylie Wong is a well-known interior designer. She has entered into a partnership with her husband, but they have no written partnership agreement. Mrs Wong performs all the decorating work, and all the receipts and business documents are solely in her name. Any cheques received are made up in her name and deposited into a joint bank account. This account is used by Mr and Mrs Wong and is used for household and business outgoings. Mr Wong helps in the business by taking phone calls from clients and suppliers. Mrs Wong believes that she and her husband are in a taxation law partnership and that they act for the partnership.

REQUIRED:

Based on the facts, you are required to answer the following questions:

(a) Advice Mrs Wong as to whether she and her husband are in partnership. Your response should include relevant legislation, case laws, and tax rulings.

(b) Both Mr and Mrs Wong are inexperienced in taxation law and practice, so they would appreciate it if you would explain different models of starting a business to them. With reference to legal authority, advise them on the taxation consequences if they were to conduct the interior designing business either through a company or a discretionary trust.