14 Other Australian income

Show at O the total amount of other Australian income.

If the amount is a loss, print L in the box at the right of the amount. The following are some examples of the amounts to be included at O.

Gains on the disposal of traditional securities

Show at O any gains on the disposal or redemption of a traditional security which are assessable under 26BB of ITAA 1936. For more information about gains and losses on traditional securities, including traditional securities that are convertible notes or exchangeable notes, see You and your shares 2010 (NAT 2632).

Bonuses from life insurance companies and friendly societies

If, during the year ended 30 June 2010, the partnership received any bonuses or other amounts in the nature of bonuses on the maturity, forfeiture, partial or full surrender of a short-term life insurance policy taken out after 7 December 1983, you may need to show the amount at O.

Life insurance policies are issued by life insurance companies and friendly societies.

A partnership is regarded as having received a bonus if it re-invests or otherwise deals with the bonus during the income year.

Do not include the amount shown on a bonus certificate if the partnership:

• received it because of death, accident, illness or other disability suffered by the person on whose life the policy was effected
• received it under a policy held by a superannuation fund or scheme, an approved deposit fund or a pooled superannuation trust
• can show that the amount was received because of serious financial difficulties
• received a bonus certificate in respect of an amount allocated to increase the amount receivable on surrender or maturity.

If the policy has a date of commencement of risk on or before 7 December 1983, any bonuses received this year are not assessable.

If the policy has a date of commencement of risk after 7 December 1983, any bonus is included in assessable income in full if received during the first eight years after the date of commencement of risk of the policy. Two-thirds of the bonus amount is included if it is received in the ninth year and one-third of the bonus amount if it is received in the 10th year. Amounts received after the 10th year are not included.

If, during the term of the policy, the amount of a premium increases by more than 25% over the previous year's premium, the policy is taken to have started again with a commencement date at the beginning of the policy year in which the premium increased.

The partner may on their own tax return, claim a tax offset for a bonus or any other amount in the nature of a bonus included in the income, if the organisation issuing the life policy is a:

• life insurance company that pays tax on the income from which the amount was paid, or
• friendly society.

The tax offset for the 2009-10 income year is equal to 30 cents in each dollar.

Include the bonus or other amount in the nature of a bonus in the calculation of net income or loss of the partnership and apportion it among the partners or beneficiaries in the same ratio as they share in that net income or loss.

If the partnership received assessable bonuses from a life insurance company or friendly society, include the total amount at O. To ensure the tax offset is allowed, provide a statement showing the amounts from the life insurance company and friendly society life insurance policies. Attach the statement to the tax return. Print X in the Yes box at Have you attached any 'other attachments'? at the top of page 1 of the tax return.

Record keeping

If a bonus or other amount in the nature of a bonus is included at O, or an amount was not included because of the circumstances under which it was received, keep a record of the following:

• the type of policy
• the name of the issuing organisation
• the policy number
• the date the policy was taken out
• the bonus statement or advice
• the date that each amount was received
• the nature of each amount, for example, bonus, loan or withdrawal
• the circumstances under which each amount was received, for example, partial surrender of policy, serious financial difficulties, death, accident, illness or other disability
• the basis of calculation of the amount included.

Bonuses credited from friendly society income bonds

Include bonuses received from friendly society income bonds at O. The distribution statement issued by friendly societies to income bond holders will advise the amount that should be included as income. Do not include these amounts in the calculation of the tax offset applicable to bonuses from life insurance policies.

Add backs: Listed investment company (LIC) capital gain

If a distribution is received from another partnership or trust which advises it has claimed a deduction for a LIC capital gain amount, the partnership or trust is required to add back as income its share of the deduction allowed to the other partnership.

Royalties

For information on royalty income shown at O, see appendix 2.

Foreign exchange gains or losses

Show at O assessable Australian source foreign exchange (forex) gains or deductible losses that you have not already included at any other label, for example, a label in item 5 Business income and expenses. If the total amount at O is a loss, print L in the box at the right of the amount.

TOFA gains from financial arrangements

If the TOFA rules apply to calculate a gain or loss on the partnership's financial arrangements include at this item those assessable gains and any assessable TOFA transitional balancing adjustments relating to existing financial arrangements.

Include here any TOFA gains (or part thereof) that you have not already included at:

• SNet income or loss from business item 5
• JGross interest item 11
• KUnfranked amount item 12
• BGross other assessable foreign source income item 23.