The partnership's income from another partnership includes income or a loss which the partnership received, was entitled to receive or was entitled to deduct in respect of that other partnership.
The partnership's income from a trust includes income the partnership received or was entitled to receive as a beneficiary under a will, settlement, and deed of gift or other instrument of trust.
Distributions from another partnership or trust include the share of any:
- TFN amounts withheld from interest, dividends and unit trust distributions
- franking credits attached to franked dividends received indirectly from an Australian franking company, or
- amounts withheld where an ABN was not quoted.
Copy the details from any statements received from the other partnerships and trusts to worksheet 2. This is the partnership's record if the Tax Office needs more details later.
Do not show any dividends or franking credits indirectly received that were attributable to distributions from a New Zealand franking company at this label. Show these amounts at item 23 Other assessable foreign source income.
Do not include any payments and loans received from trustees or amounts that are debts forgiven by trustees that are treated as dividends under Division 7A of the ITAA 1936. Show these amounts at K item 12. However, Division 7A was amended to enable certain amounts treated as dividends to be franked, see Unfranked dividends below.
Do not include foreign income or a capital gain in income distributions from partnerships and trusts at item 8. Show foreign income at:
- item 22 Attributed foreign income, and
- item 23 Other assessable foreign source income.
A partnership does not own assets for CGT purposes. A partnership asset is owned by the partners in the proportion to which they have agreed. If a CGT event happens in relation to a partnership during the year or to one of its CGT assets, or the partnership receives a share of a capital gain from a trust, any capital gain or capital loss is made by the partners individually. Each partner must calculate their capital gain or capital loss by reference to the partnership agreement, or to partnership law if there is no agreement, and include it on their own tax return. For more information on how a partner returns their share of a capital gain or capital loss, see the Guide to capital gains tax 2010.
End of attentionTo the extent that family trust distribution tax (FTDT) has been paid on an amount that would otherwise be assessable to the partnership, that amount is excluded from the assessable income of the partnership under section 271-105 of Schedule 2F to the ITAA 1936.
To the extent that FTDT has been paid on income or capital of a trust to which the partnership is presently entitled or which has been distributed to the partnership, that income or capital is excluded from the assessable income of the partnership under section 271-105 of Schedule 2F to the ITAA 1936.
For more information about the circumstances in which FTDT is payable, see Family trust distribution tax.
If trustee beneficiary non-disclosure tax (TBNT) has been paid in respect of an amount that would otherwise be assessable to the partnership, that amount is excluded from the assessable income of the partnership.
Any losses or outgoings incurred in deriving an amount that is excluded from assessable income because FTDT or TBNT has been paid are not deductible. The partnership cannot claim a tax offset for any franking credits attributable to the whole or a part of a dividend that is excluded from assessable income.
Primary production
Distribution from partnerships
Show at A the amount of primary production income or loss distribution from other partnerships.
If this amount is a loss, print L in the box at the right of the amount.
Distribution from trusts
Show at Z the amount of primary production income distribution from trusts. Include income to which the partnership became presently entitled in the income year but has not yet received. If this amount is a loss, print L in the box at the right of the amount. Show a loss at Z only if it is a component of an overall distribution of net income from the same trust.
If this amount is not a loss, in the box at the right of Z print the code from Table 4 that best describes the type of trust from which the distribution is made. If this amount is from more than one type of trust, print the code that represents the trust with the greatest amount of distribution.
|
Code |
Type |
|
D |
Deceased estate |
|
F |
Fixed trust, - other than a fixed unit trust or public unit trust described in U, P or Q |
|
H |
Hybrid trust |
|
S |
Discretionary trust, - where the main source of income of the trust is from service and/or management activities |
|
T |
Discretionary trust, - where the main source of income of the trust is from trading activities |
|
I |
Discretionary trust, - where the main source of income of the trust is from investment activities |
|
M |
Cash management unit trust |
|
U |
Fixed unit trust, - other than a public unit trust described in P or Q |
|
P |
Public unit trust (listed) - other than a cash management unit trust |
|
Q |
Public unit trust (unlisted) - other than a cash management unit trust |
Deductions relating to distribution in A and Z
Show at S the partnership's deductions for its own expenses relating to primary production distributions from other partnerships or trusts.
If you have prepaid any expenses, the amount that you can claim at S may be affected by the prepayment provisions. For more information, see Deductions for prepaid expenses 2010.
Expenses listed here that are costs associated with borrowing and servicing debt may not be allowable deductions under the thin capitalisation rules. For more information, see appendix 3. The disallowed amount reduces the amount that would otherwise be included at S.
Net primary production distributions
Show at this label the net result of partnership and trust distributions of primary production income.
Write the total amount in the box at Net primary production distribution. If this amount is a loss, print L in the box at the right of the amount.
Non-primary production
Distribution from partnerships, less foreign income
Show at B the amount of non-primary production income or loss distributions from other partnerships. Include any share of credit for tax withheld from foreign resident withholding that is attached to the distribution. (You also include the share of credit at U item 8).
If the amount at B is a loss, print L in the box at the right of the amount.
If the distribution includes franked dividends from a franking entity, check the advice detailing the distribution to ensure that the amounts to be included at this label represent both the partnership's share of the franked dividend and its share of the franking credit attached to the franked dividend. The franking credit is included at D item 8.
Do not show any dividends or franking credits indirectly received attributable to distributions from a New Zealand franking company at this label. If the partnership received dividends or franking credits indirectly from a New Zealand franking company, see item 23 Other assessable foreign source income.
If the partnership received a distribution from another partnership and that other partnership advised it claimed a deduction in respect of a listed investment company (LIC) capital gain amount, the partnership is required to include its share of the deduction allowed to the other partnership at item 14 Other Australian income.
End of attentionDistribution from trusts, less net capital gain and foreign income
Show at R the amount of non-primary production income distributions from trusts. Include any share of credit for tax withheld from foreign resident withholding that is attached to the distribution. (Include the share of credit for tax withheld from foreign resident withholding at U item 8.)
If the distribution includes franked dividends from a franking entity, check the advice detailing the distribution to ensure that the amounts to be included at this label represent both the partnership's share of the franked dividend and its share of the franking credit attached to the franked dividend. The franking credit is also included at D item 8.
Do not show any dividends or franking credits indirectly received which were attributable to distributions from a New Zealand franking company at this label. If the partnership received dividends or franking credits indirectly from a New Zealand franking company, see item 23 Other assessable foreign source income.
Include income to which the partnership became presently entitled in the income year but has not yet received. If this amount is a loss, print L in the box at the right of the amount. Show a loss at R only if the amount is a component of an overall distribution of net income from the same trust.
If this amount is not a loss, in the box at the right of R print the code from table 4 that best describes the type of trust from which the distribution is made. If this amount is from more than one type of trust, print the code that represents the trust with the greatest amount of distribution.
If the partnership received a distribution from a trust and that trust advised that it claimed a deduction in respect of a listed investment company (LIC) capital gain amount, the partnership is required to include its share of the deduction allowed to the trust at item 14 Other Australian income.
End of attentionDeductions relating to distribution in B and R
Show at T the partnership's deductions for its own expenses for non-primary production distributions from other partnerships or trusts. If any expenses have been prepaid, the amount that you can claim at T may be affected by the prepayment provisions. For more information, see Deductions for prepaid expenses 2010.
Expenses listed here that are costs associated with borrowing and servicing debt may not be allowable deductions under the thin capitalisation rules. For more information, see appendix 3. The disallowed amount reduces the amount that would otherwise go at T.
If FTDT has been paid on the income or capital of another partnership or trust that is distributed to the partnership, that income or capital is not included in partnership's assessable income. Do not show this at A, Z, B or R. You cannot claim a deduction for any losses or outgoings incurred in deriving an amount which is excluded from assessable income at S or T. For more information about the circumstances in which FTDT is payable see Family trust distribution trust.
If trustee beneficiary non-disclosure tax (TBNT) has been paid in respect of an amount that would otherwise be assessable to the partnership, that amount is excluded from the assessable income of the partnership. Do not show that income at A, Z, B or R. You cannot claim a deduction for any losses or outgoings incurred in deriving an amount which is excluded from assessable income at S or T.
Net non-primary production distribution
Show at this label the net result of partnership distributions of non-primary production income.
Write the total amount in the box at Net non-primary production distribution. If this amount is a loss, print L in the box at the right of the amount.
Share of credits from income
Share of credit for tax withheld where ABN not quoted
If the income shown at A, Z, B or R includes any share of amounts withheld where an ABN was not quoted, show the share of that credit at C.
Share of franking credit from franked dividends
Show at D the partnership's share of any franking credits from a franking entity received through another partnership or trust.
Show franking credits received directly from a paying franking entity at M item 12.
Do not show franking credits relating to a dividend received through another partnership or trust if any of the following apply:
- They were attributable to a distribution from a New Zealand franking company. If the partnership received franking credits indirectly from a New Zealand franking company, see item 23 Other assessable foreign source income.
- The holding period rule and related payments rule were not satisfied in relation to the dividend. For more information, see appendix 1.
- FTDT has been paid on the dividend paid or credited by a company which has made an interposed entity election. The dividend is excluded from assessable income under section 271-105 of Schedule 2F to the ITAA 1936. A franking credit or tax offset cannot be claimed for any franking credit attached to that dividend. For more information about when FTDT is payable, see Family trust distribution tax.
- Trustee beneficiary non-disclosure tax has been paid in respect of the dividend. A franking credit or tax offset cannot be claimed for any franking credit attached to that dividend.
Share of credit for TFN amounts withheld from interest and dividends distributions
Unless the partnership claimed an exemption or lodged a TFN, the investment body may withhold amounts from interest, dividend distributions. These are called 'TFN amounts withheld'. The current rate is 46.5% of the payment made.
Show at E the share of the net amount of TFN amounts withheld on interest dividends distributions relating to a distribution from another partnership or trust. Credits for TFN amounts withheld are allowed in the assessments of the partners.
Share of credit for tax withheld from foreign resident withholding
Amounts may be withheld from some payments to specific recipients due to the operation of the foreign resident withholding measure. These payments relate to entertainment or sports activities, construction and related activities and casino gaming junket activities.
Show at U the partnership's share of any foreign resident withholding credits received from other partnerships and trusts. Ensure this amount is included in the gross distribution amount shown at B Distribution from partnerships, less foreign income or R Distribution from trusts, less net capital gain and foreign income.