The most common and most likely answer to this crossword clue is the 7 letter word PREMISS
I've seen this crossword clue in The Times
P
R
E
M
I
S
S
Buddy explains!
The straight part
We know that "That’s the assumption" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case that’s the assumption = premiss.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does PREMISS mean?
PREMISS noun- A proposition antecedently supposed or proved; something previously stated or assumed as the basis of further argument; a condition; a supposition.
- Any of the first propositions of a syllogism, from which the conclusion is deduced.
- (usually in the plural) Matters previously stated or set forth; especially, that part in the beginning of a deed, the office of which is to express the grantor and grantee, and the land or thing granted or conveyed, and all that precedes the habendum; the thing demised or granted.
- (usually in the plural) A piece of real estate; a building and its adjuncts.
- (authorship) The fundamental concept that drives the plot of a film or other story.
- To state or assume something as a proposition to an argument.
- To make a premise.
- To set forth beforehand, or as introductory to the main subject; to offer previously, as something to explain or aid in understanding what follows.
- To send before the time, or beforehand; hence, to cause to be before something else; to employ previously.