51 Statement of distribution
The distribution statement must show only Australian source income or loss, as shown at item 20 on the partnership tax return.
If the following persons or entities are partners, and the partnership claimed a deduction in respect of a LIC capital gain amount, the partnership must advise these partners of their share of the deduction claimed:
- trustee of a trust
- trustee of a superannuation entity
- company, including a life insurance company
- partnership.
Each partner will show the distribution of the net Australian income or loss on each partner’s own tax return at the following:
Individual
- item 13 Partnerships and trusts; this item is in the Tax return for individuals (supplementary section)
Company
- item 6 Calculation of total profit or loss in the Company tax return 2016
Trust
- item 8 Partnerships and trusts in the Trust tax return 2016, except for distributions of income subject to foreign resident withholding, which are shown at item 5 Business income and expenses.
Do not show capital gains, attributed foreign income, foreign source income or foreign income tax offsets on the distribution statement. Record and distribute these separately, keeping details for your records.
Include this income or credit on each partner’s own tax return at the following:
- for an individual tax return
- item 18 Capital gains
- item 19 Foreign entities
- item 20 Foreign source income and foreign assets or property
- for a company tax return
- item 7 Reconciliation to taxable income or loss
- item 20 Foreign income tax offset
- for a trust tax return
- item 21 Capital gains
- item 22 Attributed foreign income
- item 23 Other assessable foreign source income.
For more information on capital gains, see the Guide to capital gains tax 2016.
More than four partners
If you are completing a tax return on paper and the total number of partners is more than four, photocopy page 11 of the tax return before filling it in, one copy for each additional partner. Complete the copies showing the details of each additional partner. Attach these to the tax return and print X in the Yes box at Have you attached any ‘other attachments’? at the top of page 1 of the tax return.
Completing the statement of distribution
For each partner's individual statement of distribution, show the:
- individual name or non-individual name
- residential or business address
- tax file number (TFN)
- individual’s date of birth
- non-individual’s Australian business number (ABN).
Show the full name and TFN/ABN of each partner. If the TFN or ABN is not shown, show the partner’s address. If the partner is a trustee, show the name and TFN of the trust.
A Share of income, Primary production and B Share of income, Non-primary production
Show each partner’s share of income in whole dollars only, separated into primary production income and non-primary production income. While the partnership's non-primary production income includes franked distributions, for the purposes of recording partners' franked distributions in the distribution statements, franked distributions should not be included at B. Franked distributions should be shown at L.
If a loss is distributed, print L in the box at the right of the amount.
C Credit for tax withheld where ABN not quoted
Show each partner’s share of credit for amounts withheld where an ABN was not quoted. Show whole dollars only. The aggregate of each amount shown at C for each completed distribution statement equals the sum of any credit claimed at:
- T item 6 Tax withheld where ABN not quoted
- C item 8 Share of credit for tax withheld where ABN not quoted.
L Franked distributions
Show each partner’s share of franked distributions (net of relevant expenses) and its share of the franking credits referable to those franked distributions (the franking credit 'gross-up') in whole dollars only.
D Franking credit
Show each partner’s share of franking credits for franked dividends. The aggregate of each amount shown at D for each completed distribution statement must equal the sum of franking credits claimed at:
- D item 8 Share of franking credits from franked distributions
- M item 12 Franking credit.
E TFN amounts withheld
Show each partner’s share of credit for amounts withheld from payments of interest, dividends and unit trust distributions by investment bodies because the recipient did not quote a TFN. The aggregate of each amount shown at E for each completed distribution statement must equal the sum of TFN amounts withheld on interest, dividends and unit trust distribution at:
- E item 8 Share of credit for TFN amounts withheld from interest, dividends and unit trust distributions
- I item 11 TFN amounts withheld from gross interest
- N item 12 TFN amounts withheld from dividends.
O Share of credit for TFN amounts withheld from payments from closely held trusts
Show at O the share of the net amount of TFN amounts withheld by a trustee of a closely held trust, which is subject to the TFN Withholding rules. The total amounts for each partner at this entry should equal the amount reported at O item 8, and the amount of credit claimed by each partner should be claimed in proportion to their partnership interest.
- Credits for the TFN amounts withheld may be claimed by the partners when they lodge their income tax returns.
For more information on the TFN withholding rules for closely held trusts, see TFN withholding for closely held trusts – Who the rules apply to.
F Credit for tax withheld – foreign resident withholding
Show each partner’s share of credit for amounts withheld under foreign resident withholding. Show whole dollars only. The aggregate of each amount shown at F for each completed distribution statement must equal the total amount of credit shown on the tax return at U item 6 and U item 8.
G Australian franking credits from a New Zealand franking company
Show each partner’s share of Australian franking credits that were attached to franked dividends received from a New Zealand franking company either directly or indirectly through another partnership or trust.
This amount is not necessarily the total amount that each partner can claim. This is because under section 220-405 of the ITAA 1997, each partner’s share of franking credits should be reduced by the amount of any share of supplementary dividend paid by the New Zealand franking company if:
- the supplementary dividend was paid in connection with the franked dividend, and
- the partner is entitled to a foreign income tax offset because the franked dividend is included in their assessable income, see Appendix 1.
If the above conditions exist, the reduction should be made on the partner’s own tax return.
H Share of net small business income
Show each partner's share of net small business income. Show whole dollars only. The aggregate of each amount shown at H for each completed distribution statement must equal the amount shown at V item 5 Net small business income.
You need to advise any partners who are individuals of their share of net small business income from the partnership to assist them to work out their entitlement to the small business income tax offset.
Partners who are prescribed persons (under 18 years of age and not excepted persons) can only claim the offset on their share of net small business income if they were actively involved in carrying on the business of the partnership.
I Share of National rental affordability scheme tax offset
Show each partner’s share of the NRAS tax offset. The aggregate of each amount shown at I for each completed distribution statement must equal the amount of NRAS tax offset entitlement shown at F item 49 on the partnership tax return. With this figure, include cents.
J Share of net financial investment income or loss
Show each partner’s share of net financial investment income or loss. Show whole dollars only. The aggregate of each amount shown at J for each completed distribution statement must equal the amount shown at G item 50.
K Share of net rental property income or loss
Show each partner’s share of net rental property income or loss. Show whole dollars only. The aggregate of each amount shown at K for each completed distribution statement must equal the amount shown at H item 50.
M Share of exploration credits
Show each partner’s share of exploration credits. Show whole dollars only. The aggregate of each amount shown for each completed distribution statement must equal the total exploration credits received by the partnership.
Real and effective control of share in partnership income
If a partner aged 18 years or more on the last day of the partnership’s income year does not have real and effective control and disposal of part or the whole of their share of partnership net income, the partner pays further tax, see section 94 of the ITAA 1936. Provide the partner's details at the top of page 13 of the tax return.
Real control depends on the constitution and control of the partnership and the conduct of its operations. Broadly, there is a lack of real control if the partner must allow any part of their share of income to be dealt with in a particular way so that the partner cannot, on their own, deal with it in another way.
If you are completing a tax return on paper, and there is more than one partner without real or effective control over their part of the partnership income, then on a separate sheet of paper titled ‘Additional partners without real or effective control’ list the title and full names of the additional partners. Attach it to the tax return and print X in the Yes box at Have you attached any ‘other attachments’? at the top of page 1 of the tax return.
Under special circumstances, the Commissioner may treat a partner as having real control of a share or part of a share of partnership income. If you want a partner to be treated as having real control of a share or part of a share of partnership income, provide full details on a separate sheet of paper in support of your request. Attach it to the tax return and print X in the Yes box at Have you attached any ‘other attachments’? at the top of page 1 of the tax return.