Show at I the gross distribution from all partnerships (unless it is non-arm’s length income of a complying superannuation fund, complying ADF or a PST in which case show the amount at U Net non-arm's length income).
If the distribution includes an amount of foreign income, including New Zealand franking company dividends and supplementary dividends, show that portion of the distribution at D1 Gross foreign income and take it into account in calculating D Net foreign income. Do not include it at I.
If the amount calculated is a loss, print L in the Loss box at the right of the amount.
Include any amounts subject to foreign resident withholding in Australia that were distributed to the fund from a partnership. Also include the fund’s share of credit from foreign resident withholding. A credit can be claimed for the fund’s share of credit from foreign resident withholding in the calculation statement at H2 Credit for tax withheld - foreign resident withholding item 12.
If a distribution includes franked dividends (including franked non-share dividends), determine the fund's entitlement to a franking credits tax offset.
The fund is not entitled to a franking credits tax offset if:
- the relevant interest is not held at risk as required under the holding period and related payment rules
- there is some other manipulation of the imputation system
- the gross distribution from the partnership is exempt income or non-assessable non-exempt income (other than because of certain provisions mentioned in section 207-110 of the ITAA 1997).
If the fund is entitled to a franking credits tax offset, 'gross up' the franked dividend distribution to include the fund’s share of any attached franking credits. Show all grossed up distributions at I. Show the fund’s share of the franking credits attached to such dividend distributions at:
- E1 Complying fund's franking credits tax offset item 12,if the fund is a complying superannuation fund, complying ADF or PST, or
- C2 Rebates and tax offsets item 12, if the fund is a non-complying superannuation fund or non-complying ADF.
If the fund is not entitled to a franking credits tax offset, show only the amount of the franked dividend at I. Do not show the franking credit attached to the dividend anywhere in the fund tax return.
To the extent the fund’s share of partnership income includes an amount on which family trust distribution tax (FTDT) has been paid, do not include that amount in the fund’s assessable income (section 271-105 of Schedule 2F to the Income Tax Assessment Act 1936 (ITAA 1936)).
To the extent the fund’s share of partnership income includes an amount received indirectly from a closely held trust on which trustee beneficiary non-disclosure tax (TBNT) has been paid, do not include that amount in the fund’s assessable income.
- Any losses or outgoings that the fund incurred in deriving an amount that is excluded from assessable income because FTDT or TBNT has been paid are not deductible.
- The fund cannot claim a franking credit tax offset for any franking credits attributable to the whole or a part of a dividend that is excluded from assessable income because FTDT or TBNT has been paid.
Even if the TOFA rules apply to the fund, show at I all gross distributions from partnerships. This includes amounts from financial arrangements subject to the TOFA rules.
If what you show at I includes an amount brought to account under the TOFA rules, also complete item 16 Taxation of financial arrangements (TOFA).
See also
Record keeping
Keep a record of the:
- full name of the partnership
- TFN of the partnership if known
- amount of income.
Notes for completing J Unfranked dividend amount, K Franked dividend amount, L Dividend franking credit
J, K and L refer to dividends derived from investments in resident entities (Australian payers), including listed investment companies.
Dividends or non-share dividends that the fund receives from Australian payers may carry franking credits. Such dividends are called franked dividends, and the franking credits they carry reflect the amount of tax paid by the payer.
Dividends and non-share dividends where no tax has been paid are called unfranked dividends.
Add all the franked and unfranked dividend amounts received and all the franking credits to determine the fund’s assessable income from these dividends.
Non-share dividends are treated in the same way as dividends. Show the amount of the non-share dividends, whether franked or unfranked, and any amount of franking credit attached to those dividends, at the appropriate place on the tax return as if they were for shares.
- Non-share dividends are returns paid on non-share equity interests. These interests are not shares in legal form but are treated in the same way as shares under the debt and equity rules. Debt and equity tests: guide to the debt and equity tests, at ato.gov.au provides an overview of the debt and equity rules and explains what a non-share equity interest is.
To the extent that FTDT has been paid on a dividend (including a non-share dividend) paid or credited to the fund by a company that has made an interposed entity election, do not include that amount in the assessable income of the fund (section 271-105 of Schedule 2F to the ITAA 1936).
- Any losses or outgoings that the fund incurred in deriving an amount that is excluded from assessable income because FTDT has been paid are not deductible.
- The fund cannot claim a franking credit tax offset for any franking credit attributable to the whole or a portion of a dividend that is excluded from assessable income because FTDT has been paid.
If a complying superannuation fund, complying ADF or a PST received a dividend from a private company, you must establish whether the dividend is non-arm's length income. If the dividend is non-arm's length income, show the dividend amount (along with any attached franking credit for which the fund is entitled to a franking credit tax offset) at U Net non-arm’s length income.
Dividends that form part of net income from trusts must be shown at N or O and P and not at J, K or L (unless it is non-arm’s length income in which case it is included at U Net non-arm’s length income).
Dividends that form part of a partnership distribution are shown at I and not at J, K or L (unless it is non-arm’s length income in which case it is included at U Net non-arm’s length income).
See also
- TR 2006/7 Income tax: special income derived by a complying superannuation fund, a complying approved deposit fund or a pooled superannuation trust in relation to the year of income.