37. Business name of main business
Show the business name of the main business of the partnership. The business name of the main business activity should be consistent from year to year, except in the year of a name change or if it is no longer the main business.
If the business name is legally changed, send written advice of the change to us. For further information on how to update business details, see Update your details.
Show the current business name on the tax return.
38. Business address of main business
Show the street address of the main business. This is the place where most of the business decisions are made. Ensure that you include the postcode at label A.
Items 39 to 40 below reflect amounts that have been calculated for tax purposes.
39. Opening stock
Show at label C the total value of all trading stock on hand at the beginning of the income year or accounting period for which the partnership tax return is being prepared. The amount shown by the partnership at label C is the calculated value for income tax purposes under section 70-40 of the ITAA 1997, or for small business entities using the simplified trading stock rules (subsection 328-295(1) of the ITAA 1997). The opening value of an item of stock must equal its closing value in the previous year. If you did not have any trading stock in the previous year, the value of trading stock at the start of the year is zero. This might occur in the case of a new business, or in the first year you have trading stock.
Include motor vehicle floor plan stock and work in progress of manufactured goods.
Do not include any amount that represents opening stock of a business that started operations during the income year. Show this amount at item 5 – label E Cost of sales.
40. Purchases and other costs
Show at label B the cost of direct materials used for manufacture, sale or exchange, in deriving the gross proceeds or earnings of the business.
Former STS taxpayers still using the STS accounting method
If the partnership is eligible and has chosen to continue using the STS accounting method, only show at label B purchases and other costs which the partnership has paid. See Continue use of the STS accounting method.
41. Closing stock
If the partnership is a small business entity choosing to use the simplified trading stock rules, see the information for small business entities below. Otherwise, go to All other businesses.
Small business entities
Small business entities only need to account for changes in the value of trading stock if the value of stock on hand at the start of the income year and a reasonable estimate of the value of stock on hand at the end of the income year varies by more than $5,000.
For more information on ‘reasonable estimate’, see Simplified trading stock rules.
Small business entities who wish to do so can still conduct a stocktake and account for changes in the value of trading stock.
If the difference between the value of opening stock and a reasonable estimate of closing stock is more than $5,000, the partnership must account for the change in the value of trading stock, go to step 2. If the difference is not more than $5,000, go to step 1.
Step 1
If the difference referred to above is $5,000 or less and the partnership chooses not to account for this difference, the closing stock value at label D is the same as the value at item 39 – label C. Do not put the reasonable estimate at label D.
Print in the CODE box at the right of label D the code letter from table 6 that matches the code the partnership used to value closing stock in the previous year.
|
Code |
Valuation method |
|---|---|
|
C |
Cost |
|
M |
Market selling value |
|
R |
Replacement value |
If this is the partnership’s first year in business, the value of the closing stock in the previous year will be zero; print C in the CODE box. You have now finished with this question.
Step 2
If the difference referred to above is more than $5,000 or the partnership chooses to account for the difference in trading stock, the closing stock values must be brought to account under section 70-35 of the ITAA 1997. See the information for All other businesses for instructions on how to calculate the value of closing stock.
The partnership must include in the closing stock value at label D the value of all stock on hand, regardless of whether the partnership has paid for the stock.
All other businesses
Show at label D the total value of all trading stock on hand at the end of the income year or accounting period for which the partnership tax return is being prepared. The amount at label D is the value calculated for income tax purposes under section 70-45 of the ITAA 1997.
If the partnership is registered for GST or required to be registered for GST, the value of closing stock (other than items the supply of which was not a taxable supply) should not include an amount equal to the input tax credit that would arise if the partnership had acquired the item solely for business purposes at the end of the income year. Some items of trading stock (such as shares) are not subject to GST, meaning there will be no input tax credits to consider.
Include motor vehicle floor plan stock and work in progress of manufactured goods.
Do not include any amount for closing stock of a business that ceased operations during the income year; show this amount at Total business income item 5.
Print in the CODE box the code from Table 6 indicating the method used to value closing stock for income tax purposes. If you use more than one method, use the code for the method representing the greatest value.
You can use different methods to value the same item of trading stock in different income years, and you can value similar items using different methods in the same income year.
However, the opening value of an item in a particular income year must equal the closing value for that item in the previous income year. The partnership can't reduce the value of stock on hand by creating reserves to offset falls in the value of stock or any other factors. Keep records showing how each item was valued.
The partnership may elect to value an item of trading stock below the lowest value calculated by any of these methods because of obsolescence or other special circumstances, but the value in the election must be reasonable. If you elect to value an item of trading stock below cost, market selling value and replacement value, see item 47 Trading stock election.
If you include incorrect trading stock information on the tax return, advise us by submitting a full statement of the facts, accompanied by a reconciliation of the value of stock as returned for each income year with the values permissible under the law.
Partnerships engaged in manufacturing include the value of partly manufactured goods as part of their stock and materials on hand at the end of the income year.
For information on the circumstances in which packaging items held by a manufacturer, wholesaler or retailer are ‘trading stock’ as defined in section 70-10 of the ITAA 1997, see TR 98/7 Income tax: whether packaging items (ie, containers, labels etc) held by a manufacturer, wholesaler or retailer are trading stock.
Items 42 and 43 below reflect amounts calculated for accounting purposes.
42. Trade debtors
Show at label E the total amounts owing to the partnership at year end for goods and services provided during the income year, that is, current trade debtors. Include this amount at item 33 All current assets.
43. Trade creditors
Show at label H the total amounts owed by the partnership at year end for goods and services received during the income year, that is, current trade creditors. Include this amount at item 35 All current liabilities.
Items 44 and 45 below reflect amounts that have been calculated for tax purposes.
44. Total salary and wage expenses
Show at label L the total salary, wages and other labour costs actually paid or payable to persons employed in the partnership’s business. However, exclude those costs for private domestic assistance or which form part of capital expenditure, as they are not deductible.
You can't deduct salary and wage expenses where you have not complied with your PAYG withholding obligations. See Removing tax deductibility of non-compliant payments
A partner can't be an employee of a partnership. You can't claim a deduction for partners’ salaries, nor can partners’ salaries create or increase a partnership loss. In reality, partners’ salaries are an allocation or advancement of profits before general distribution and are not taken into account in calculating the net partnership income or loss. See TR 2005/7 Income tax: the taxation implications of ‘partnership salary’ agreements.
You can only claim a deduction for a payment made or liability incurred by a partnership to an associated person, principal, agent, related entity or associate entity if it is incurred in producing assessable income and we are satisfied that the amount is reasonable.
These expenses include any salary and wage component shown at item 5 – label E Cost of sales, such as:
- allowances
- bonuses
- casual labour
- retainers and commissions paid to people who received a retainer
- workers’ compensation paid through the payroll
- direct and indirect labour costs
- directors’ fees
- holiday pay
- locums
- long service leave
- lump sum payments
- other employee benefits
- overtime
- payments under an incentive or profit-sharing scheme
- retiring allowances
- sick pay.
Include here and at item 45 Payments to associated persons any salary or wages paid to an associated person, principal, agent, related entity or associate entity.
However, these expenses do not include:
- agency fees
- contract payments
- sub-contract payments
- service fees
- superannuation
- management fees
- consultant fees.
Print in the CODE box the code from table 7 that shows where you predominantly reported salary and wage expenses.
|
Section salary and wages were wholly or predominantly reported in: |
Code |
|---|---|
|
The expense component of Cost of sales |
C |
|
All other expenses |
A |
|
The expense component of both Cost of sales and All other expenses |
B |
|
Neither Cost of sales nor All other expenses |
O |
45. Payments to associated persons
For partnerships, show at label M the amounts, including salaries, wages, commissions, superannuation contributions or allowances, paid to:
- a relative of a partner
- another partnership in which a relative is a partner
- a shareholder or director (or their relatives) of a private company that is a partner in the partnership
- a beneficiary (or a relative of a beneficiary) of a trust where the trustee is a partner in the partnership.
Do not show at label M the amounts paid to a partner in the partnership.
Also, include the amounts of salaries and wages paid to an associated person, relative, principal, agent, related entity or associate entity at item 44 Total salary and wage expenses.
Record keeping
Excessive payments to a relative or other related entity may not be deductible (see section 26-35 of the ITAA 1997). Keep a record of the following to establish the reasonableness of remuneration:
- full name of relative or other related entity
- relationship
- age, if under 18 years old
- nature of duties performed
- hours worked
- total remuneration
- salaries or wages claimed as deductions
- other amounts paid, for example, retiring gratuities, bonuses and commissions.
46. Fringe benefit employee contributions
Show at label T all the payments the partnership has received from recipients of fringe benefits.
Employee contributions form part of the employer’s or associate’s assessable income in situations where employees make payments for fringe benefits they have received.
47. Trading stock election
The partnership may elect to value an item of trading stock below the lowest value of cost, market selling value, or replacement value because of obsolescence or any other special circumstances. However, the value it elects must be reasonable. For more information on trading stock valuations where obsolescence or other special circumstances exist, see TR 93/23 Income tax: valuation of trading stock subject to obsolescence or other special circumstances.
If the partnership makes an election, print X in the Yes box at this item, otherwise, print X in the No box.
48. Aggregated turnover
Complete the following in item 48:
U Select your aggregated turnover range
You must complete label U if you are making a claim in your tax return for any of the following:
- temporary full expensing
- any of the small business entity concessions.
From the table below:
- select your category based on your aggregated annual turnover
- write the category code at label U.
Use either your 2022–23 aggregated turnover or your 2021–22 aggregated turnover to select your aggregated turnover range. For more information, see Satisfying the aggregated turnover threshold.
|
Category |
Aggregated annual turnover range |
|---|---|
|
A |
$0 to less than $7.5 million |
|
B |
$7.5 million to less than $10 million |
|
C |
$10 million to less than $20 million |
|
D |
$20 million to less than $40 million |
|
E |
$40 million to less than $50 million |
|
F |
$50 million to less than $100 million |
|
G |
$100 million to less than $200 million |
|
H |
$200 million to less than $300 million |
|
I |
$300 million to less than $400 million |
|
J |
$400 million to less than $500 million |
|
K |
$500 million to less than $600 million |
|
L |
$600 million to less than $700 million |
|
M |
$700 million to less than $800 million |
|
N |
$800 million to less than $900 million |
|
O |
$900 million to less than $1 billion |
|
P |
$1 billion or over |
If you selected P or are a significant global entity and completed label U you must also complete label V Aggregated turnover.
You will not be penalised for specifying an incorrect category where you make your best attempt to calculate your aggregated turnover.
For information about calculating your aggregated turnover, see Aggregation.
V Aggregated turnover
Did you select category P at label U or are a significant global entity and completed label U above?
No – Go to item 49.
Yes – Show at label V Aggregated turnover your actual aggregated turnover rounded to the nearest $100 million. Use either your 2022–23 or your 2021–22 aggregated turnover. For more information, see Satisfying the aggregated turnover threshold.
You will not be penalised for specifying an incorrect amount where you make your best attempt to calculate your aggregated turnover.
49 Capital allowances
Small business entities
Are you a small business using the simplified depreciation rules?
- No – Go to Depreciating assets first deducted in 2022–23.
- Yes – Read on.
Show at label S the total amount of the deductions under temporary full expensing you claimed at item 5 – label K Depreciation expenses.
Show at label T the total number of assets for which you are claiming temporary full expensing.
You have finished this question. Go to Small business entity simplified depreciation.
Depreciating assets first deducted in 2022–23
Intangible depreciating assets first deducted
Show at label A the cost of all intangible depreciating assets for which the partnership is claiming a deduction for decline in value for the first time. This will include any amounts claimed under temporary full expensing.
The following intangible assets are regarded as depreciating assets (as long as they are not trading stock):
- certain items of intellectual property, such as patents, registered designs, copyrights and certain types of licences of these
- computer software, or a right to use computer software, that the partnership acquires, develops or has someone else develop for its own use (that is, in-house software)
- mining, quarrying or prospecting rights and information
- spectrum licences
- certain indefeasible rights to use telecommunications cable systems (IRUs)
- some access rights to telecommunications sites.
A depreciating asset that the partnership holds starts to decline in value from the time the partnership uses it (or installs it ready for use) for any purpose, including a private purpose. However, the partnership can only claim a deduction for the decline in value to the extent it uses the asset for a taxable purpose, such as for producing assessable income.
If the partnership has allocated any intangible depreciating assets with a cost of less than $1,000 to a low-value pool for the income year, also include the cost of those assets at label A. Do not reduce the cost for estimated non-taxable use.
Expenditure on in-house software which has been allocated to a software development pool is not included at label A.
For more information on decline in value, cost, low-value pools, in-house software and software-development pools, see the Guide to depreciating assets 2023.
Other depreciating assets first deducted
A depreciating asset the partnership holds starts to decline in value from the time the partnership uses it (or installs it ready for use) for any purpose. However, the partnership can only claim a deduction for the decline in value to the extent it uses the asset for a taxable purpose, such as for producing assessable income.
Show at label B the cost of all depreciating assets (other than intangible depreciating assets) for which the partnership is claiming a deduction for the decline in value for the first time. This will include amounts claimed under temporary full expensing.
If any assets (other than intangible depreciating assets) costing less than $1,000 have been allocated to a low-value pool for the income year, also include the cost of those assets at B.
For information on decline in value, cost and low-value pools, see the Guide to depreciating assets 2023.
For more information, see Record keeping for capital expenses.
Do not reduce the cost for any estimated non-taxable use.
Temporary full expensing
Are you making a choice to opt out of temporary full expensing for some or all of your eligible assets?
You can choose to opt out of temporary full expensing on an asset-by-asset basis in the income year it was first used or installed ready for use for a taxable purpose and apply the other depreciation rules to that asset.. Once a choice is made, it can't be revoked.
If you have incurred improvement costs in the 2022-23 income year for an asset that you opted out of temporary full expensing for in a prior income year, you need to make a separate choice to opt out of TFE for the improvement costs if you do not want temporary full expensing to apply to those costs.
Show at label P:
- A if you are opting out for some of your assets, or
- B if you are opting out for all of your assets.
For more information, see Temporary full expensing.
Q Number of assets you are opting out for
Show at label Q the number of assets for which you have made the choice to opt out of temporary full expensing.
R Value of assets you are opting out for
Show at label R the value of the assets for which you made the choice to opt out of temporary full expensing. The value is the amount you would have otherwise claimed for these assets under temporary full expensing if you had not made the choice to opt out.
You will not be penalised for specifying an incorrect amount at label Q and R, where you have made your best attempt to determine the amounts you are opting out for.
S Temporary full expensing deductions
Show at label S the total value of the deductions that you are claiming under temporary full expensing.
T Number of assets you are claiming for
Show at label T the number of assets for which you are claiming temporary full expensing.
You will not be penalised for specifying an incorrect amount at labels S and T where you have made your best attempt to determine the amounts you are claiming for.
Self-assessment of effective life
For most depreciating assets, you can choose to:
- work out the effective life yourself (self-assess), or
- adopt the Commissioner’s determination in TR 2022/1 Income tax: effective life of depreciating assets (applicable from 1 July 2022).
Have you self-assessed the effective life of any of your depreciating assets?
- No – Print X in the No box at label C, as you have adopted the Commissioner’s effective life determination for all your depreciating assets.
- Yes – Print X in the Yes box at label C, as you have self-assessed the effective life of one or more of your depreciating assets.
For all depreciating assets
Complete the following:
- Recalculation of effective life
- Total adjustable values at end of income year
- Assessable balancing adjustments on the disposal of intangible depreciating assets
- Deductible balancing adjustments on the disposal of intangible depreciating assets
- Termination value of intangible depreciating assets
- Termination value of other depreciating assets
- N Subsequent year accelerated depreciation deductions for assets using Backing business investment
- Deduction for project pool
- Section 40-880 deduction
Recalculation of effective life
You may recalculate the effective life of assets in certain circumstances if the effective life you have been using is no longer accurate. There are also circumstances where you must recalculate the effective life of a depreciating asset.
Have you recalculated the effective life of any of your depreciating assets in 2022–23?
- No – Print X in the No box at label D.
- Yes – Print X in the Yes box at label D.
Total adjustable values at end of income year
At label E, show the total of the adjustable values of your depreciating assets as at the end of 2022-23. This is the value of all assets' costs (first and second elements) less any decline in value up to that time, or the closing value of all assets.
If you allocated any assets with a cost of less than $1,000 to a low-value pool, do not include the adjustable values of those assets at label E Total adjustable values at end of income year.
Assessable balancing adjustments on the disposal of intangible depreciating assets
At label F, show the total assessable income you have from balancing adjustment events on the disposal of intangible depreciating assets that occurred in 2022–23 (this type of assessable income may arise if, for example, you disposed of a depreciating asset for more than its adjustable value). If you did not have any assessable balancing adjustment amount in 2022–23, leave label F blank. For more information, see Appendix 6.
If you have allocated assets with a cost of less than $1,000 to a low-value pool, do not include the assessable balancing adjustments for these assets at label F Assessable balancing adjustments on the disposal of intangible depreciating assets.
Deductible balancing adjustments on the disposal of intangible depreciating assets
At label G, show the total deductible amount you have from balancing adjustment events on the disposal of intangible depreciating assets that occurred in 2022–23 (this type of deduction may arise if, for example, you disposed of a depreciating asset for less than its adjustable value). If you did not have any deductible balancing adjustment amount in 2022–23, leave label G blank. For more information, see Appendix 6.
If you have allocated assets with a cost of less than $1,000 to a low-value pool, do not include the assessable balancing adjustments for these assets at label G Deductible balancing adjustments on the disposal of intangible depreciating assets.
Termination value of intangible depreciating assets
Show at label H the termination value of each balancing adjustment event occurring for intangible depreciating assets to which the UCA rules applied, including assets allocated to a low-value pool.
Do not show at label H any termination value for in-house software for which the partnership has allocated expenditure to a software- development pool.
The relevant law states that a balancing adjustment event occurs if:
- you stop holding the asset, or
- you stop using it and expect never to use it again, or
- you have not used it and you decide never to use it.
A balancing adjustment event may occur in a year after the partnership claims temporary full expensing for an asset, on either the cost of acquisition or improvements. If so, the partnership will need to calculate a balancing adjustment amount.
Any non-taxable use of an asset in an income year after the year in which temporary full expensing has been claimed will not reduce balancing adjustment amounts for balancing adjustment events happening after the claim year. See Working out your deduction (temporary full expensing) for more information.
Generally, the termination value is the amount the partnership receives or is deemed to receive for the balancing adjustment event. It includes the market value of any non-cash benefits, such as goods and services the partnership receives for the asset.
For more information on balancing adjustment events, termination value, in-house software and software development pools, see Guide to depreciating assets 2023.
A special balancing adjustment event will also occur in an income year after the year in which temporary full expensing has been claimed when:
- it is no longer reasonable to conclude that you will use the depreciating asset principally in Australia for the principal purpose of carrying on a business; or
- it becomes reasonable to conclude that the depreciating asset will never be located in Australia.
This special balancing adjustment event is not triggered with respect to partnerships using the simplified depreciation rules, other than for those depreciating assets that are excluded from the simplified depreciation rules. For those other depreciating assets, the event may still be triggered if temporary full expensing has been claimed with respect to that asset.
If this special balancing adjustment event is triggered:
- the partnership is treated as though it had ceased to hold the asset and the termination value of the asset will be equal to its market value at that time, resulting in the temporary full expensing deduction being clawed back to the extent of the assets then market value; and
- the first element of cost is modified so that the first element of cost of the asset is the asset’s termination value at the time of the event, such that though the partnership may not thereafter work out the decline in value for that asset using temporary full expensing, the partnership might, in a later income year, be entitled to claim other capital allowances it is entitled to for that asset (for example, under the general capital allowances rules for the proportion of business use). The partnership may not claim a deduction for the asset under the general capital allowance rules in the same year as the special balancing adjustment event.
For information on record keeping, see Record keeping for capital expenses.
Termination value of other depreciating assets
Show at label I the termination value of each balancing adjustment event occurring for depreciating assets, including assets allocated to a low-value pool.
Do not show at label I any consideration received during the income year for:
- depreciating assets allocated in a prior year to a general small business pool (including assets reallocated to the general small business pool from a former long-life small business pool)
- intangible depreciating assets
- buildings or structures for which a deduction is available under the capital works provisions
- assets used in research and development (R&D) activities, or
- assets falling within the provisions relating to investments in Australian films.
A balancing adjustment event occurs if the partnership stops holding or using a depreciating asset and expects never to use it again, or decides not to use it in the future, for example, assets sold, lost or destroyed. Generally, the termination value is the amount the partnership receives or is deemed to receive for the balancing adjustment event. It includes the market value of any non-cash benefits, such as goods and services the partnership receives for the asset.
A balancing adjustment event may occur in a year after the partnership claims temporary full expensing for an asset, on either the cost of acquisition or improvements. If so, the partnership will need to calculate a balancing adjustment amount.
Any non-taxable use of an asset in an income year after the year in which temporary full expensing has been claimed will not reduce balancing adjustment amounts for balancing adjustment events happening after the claim year. See Working out your deduction (temporary full expensing) for more information.
A special balancing adjustment event will also occur in an income year after the year in which temporary full expensing has been claimed when:
- it is no longer reasonable to conclude that you will use the depreciating asset principally in Australia for the principal purpose of carrying on a business; or
- it becomes reasonable to conclude that the depreciating asset will never be located in Australia.
This special balancing adjustment event is not triggered with respect to partnerships using the simplified depreciation rules, other than for those depreciating assets that are excluded from the simplified depreciation rules. For those other depreciating assets, the event may still be triggered if temporary full expensing has been claimed with respect to that asset.
If this special balancing adjustment event is triggered:
- the partnership is treated as though it had ceased to hold the asset and the termination value of the asset will be equal to its market value at that time, resulting in the temporary full expensing deduction being clawed back to the extent of the assets then market value; and
- the first element of cost is modified so that the first element of cost of the asset is the asset’s termination value at the time of the event, such that though the partnership may not thereafter work out the decline in value for that asset using temporary full expensing, the partnership might in a later income year, be entitled to claim other capital allowances it is entitled to for that asset (for example, under the general capital allowances rules for the proportion of business use). The partnership may not claim a deduction for the asset under the general capital allowance rules in the same year as the special balancing adjustment event.
For more information on balancing adjustment events and termination value, see Guide to depreciating assets 2023.
N Subsequent year accelerated depreciation deductions for assets using Backing business investment
If you used the Backing business investment – accelerated depreciation in 2019–20 or 2020–21 for one or more assets, show at label N the amount of depreciation you are claiming in 2022–23 for those assets.
Deduction for project pool
Show at label J the partnership’s deductions for project pools. For more information, see Appendix 6.
Section 40-880 deduction
Show at label K the total of the partnership’s deductions allowable under section 40-880 of the ITAA 1997. For more information, see Appendix 6.
For more information on deductions you can claim for depreciating assets and other capital expenditure, see Guide to depreciating assets 2023.
You can also work out your depreciation and capital allowance claims by using the Depreciation and capital allowances tool.
50. Small business entity simplified depreciation
Complete the following:
- A Immediate deduction for certain assets (costing less than the relevant instant asset write-off threshold)
- B Deduction for general small business pool
Complete this item only if the partnership is a small business entity using the simplified depreciation rules.
For assets you start to hold, and first use (or have installed ready for use) for a taxable purpose from 7:30 pm AEDT on 6 October 2020 to 30 June 2023 the instant asset write-off threshold does not apply to businesses using the simplified depreciation rules.
- You must immediately deduct the business portion of the asset's cost under temporary full expensing – you do not add these assets to your small business pool.
- You must also deduct the balance of the general small business pool at the end of the 2023 income year.
You cannot opt out of temporary full expensing for assets that the simplified depreciation rules apply to unless you opt out of the simplified depreciation rules.
To complete this item use the amounts the partnership calculated for small business entity depreciation deductions at item 5 – label K Depreciation expenses.
For more information, see Simpler depreciation for small business.
A Immediate deduction for certain assets (costing less than the relevant instant asset write-off threshold)
Small businesses using the simplified depreciation rules cannot apply the instant asset write-off threshold for assets you start to hold, and first use (or have installed ready for use) for a taxable purpose from 7:30 pm AEDT on 6 October 2020 to 30 June 2023. You must immediately deduct the taxable purpose proportion of the asset's cost under temporary full expensing.
A small business entity using the simplified depreciation rules must insert 0 at label A because, in 2022–23, you do not hold an asset meeting the criteria to claim instant asset write-off.
You must also complete item 49 – labels S and T to show the amount, and number of depreciating assets, you are claiming a deduction for under temporary full expensing.
B Deduction for general small business pool
Write at label B the total amount the partnership claimed at item 5 relating to the general small business pool. This is the total amount from row (b) in Table 2.
51. National rental affordability scheme (NRAS) tax offset
Partnerships participating in the NRAS may claim their share of the refundable tax offset in their tax return.
The refundable tax offset is only available where the Housing Secretary from the Department of Social Services has issued a certificate under the NRAS. In order to claim the offset in 2022–23, the NRAS certificate must relate to the NRAS year from 1 May 2022 to 30 April 2023.
Show the partners' share of the NRAS tax offset:
- at label F of this item, and
- at item 53 Statement of distribution – label I.
The amount of the entity’s tax offset is the amount stated in the certificate issued by the Secretary of the Department of Social Services. However, if the Secretary issues the entity with an amended certificate under the National Rental Affordability Scheme Act 2008External Link, the amount of the entity’s tax offset is the amount stated in the amended certificate.
52 Small business boosts
Complete this item if the partnership is a small business (with an aggregated turnover of less than $50 million) claiming either or both the:
- small business skills and training boost
- small business technology investment boost.
For more information, see Appendix 16.
You need the amounts you calculated as bonus deductions in worksheet 1 and claimed as an expense subtraction in item 5.
Write at label A Small business skills and training boost the total bonus amount you claimed at item 5 relating to the small business skills and training boost. This is the total amount from row X in worksheet 1.
Write at label B Small business technology investment boost the total amount you claimed at item 5 relating to the small business technology investment boost. This is the total amount from row Y in worksheet 1.
53. Income tests
Complete the following:
Income tests are used to work out an individual’s eligibility for certain tax offsets and determining other obligations, such as:
- Higher Education Loan Program, and
- Vocational Education and Training Student Loan
- Student Financial Supplement Scheme repayments
- Student Start-up loan repayments
- ABSTUDY Student Start-up loan repayments
- Super co-contributions
- Medicare levy surcharge.
Income test information is also used by other agencies, such as Services Australia, to work out eligibility for other government benefits and obligations.
These income tests require the individual (where applicable) to provide their net financial investment loss and net rental property loss in their income tax return.
The individual's net financial investment loss and net rental property loss includes any financial investment income or loss and any rental property income or loss received as part of an overall distribution from a partnership.
The information provided at items 53 and 54 Statement of distribution will assist each partner to complete their income test information in their individual income tax return.
Net financial investment income or loss
If the partnership received income or claimed deductions during 2022–23, then work out the net income or loss from financial investments and show it at label G.
Financial investments for income test purposes include the following:
- shares
- an interest in a managed investment scheme, including a forestry managed investment scheme (FMIS)
- rights or options in respect of any of shares or interests in a managed investment scheme
- distributions from a partnership that included income or losses from an investment listed above
- any investment that is of a similar nature to those listed above.
Do not include any of the following when calculating the partnership's net financial investment income or loss:
- interest from everyday transactions accounts
- capital gains
- capital losses.
Managed investment schemes
The investment manager will be able to tell you whether your investment is a managed investment scheme, that is, a scheme registered under the Corporations Act 2001.
Managed investment schemes include:
- cash management trusts
- property trusts
- Australian equity (share) trusts
- international equity trusts
- agricultural schemes, which include horticultural, aquaculture and commercial horse-breeding schemes
- some film schemes
- some time-share schemes
- some mortgage schemes
- actively managed strata title schemes.
Investments that are not managed investments schemes include:
- regulated superannuation funds
- approved deposit funds
- debentures issued by a body corporate
- barter schemes
- franchises
- direct purchases of shares or other equities
- schemes operated by an Australian bank in the ordinary course of banking business, such as term deposits.
Rights and options
To work out the partnership's financial investment income or loss, you need to include income and deductions from rights and options the partnership holds over shares and interests in managed investment schemes. Rights and options include:
- warrants
- futures contracts.
For more information on financial investments and income tests, see Income tests.
Deductions
Allowable deductions the partnership can claim for an investment include (but are not limited to) expenses paid to:
- borrow money to purchase an investment
- manage investments
- obtain advice about changes to the mix of investments.
The expenses should be taken into account only to the extent that they are attributable to the partnership's financial investments.
Answering this question
Completing item 53 – label G Net financial investment income or loss.
Step 1
Use example 12 and the Worksheet to list the partnership income and deductions from financial investments, then calculate the net financial investment income or loss.
Step 2
Write the result from step 1 at label G.
Step 3
Write each partner's share of the net financial investment income or loss at item 53 – label J.
Example 12: Net financial investment income or loss
The XYZ partnership has a share portfolio. The partnership's total dividend income for the income year is $7,000 from Australian shares, all of which are unfranked (shown at item 12 – label K). The partnership claimed interest expenses of $4,300 (shown at item 16 – label P) on the money borrowed to purchase the Australian shares.
During the income year, XYZ also received income from a cash management trust (managed investment scheme), an FMIS, and dividends from foreign shares. XYZ completed the partnership tax return questions as follows:
- item 8 – label R: $400 from non-primary production distribution from cash management trust (managed investment scheme)
- item 12 – label K: $7,000 income from Australian shares
- item 10 – label Q: $1,200 from FMIS income
- item 23 – label B: $1,230 income from gross dividends from foreign shares.
This example uses only the income for the financial investments. In many cases, the financial investment income is only part of the income shown at particular items.
XYZ incurred expenses against the financial investment income and showed deductions at the following items:
- item 8 – label T: $2,500 for expenses for the cash management trust
- item 16 – label P: $4,300 for interest on money borrowed to purchase Australian shares
- item 17 – label D: $2,600 deductions for the FMIS
- item 18 – label Q: $3,000 as the interest expense on money borrowed to purchase the foreign shares was $3,000.
In addition to the above, XYZ received $300 as a share of net financial investment income from the ABC partnership. The $300 was shown at item 53 – label J on the statement of distribution for the ABC partnership tax return.
XYZ’s net financial investment income or loss is the difference between the financial investment income and deductions, plus the net financial investment income from the ABC partnership.
End of exampleWorksheet: Working out the partnership's net financial investment income or loss
Use the worksheets below to work out the partnership's net financial investment income or loss:
- Worksheet: Financial investment income calculation
- Worksheet: Financial investment deductions calculation
- Worksheet: Net financial investment income or loss calculation
The amount at row q is the partnership's net financial investment income or loss. Write this amount at item 53 – label G. If the amount is a loss, write L in the box on the right-hand side of label G.
Statement of distribution
Once you have shown the net financial investment income or loss at item 53, you also need to show each partner's share of the financial investment income or loss at item 54 – label J. If the amount at label J is a loss, print L in the box at the right of the figure.
Go to item 53 – label H.
Net rental property income or loss
Show at item 53 – label H the amount of the partnership’s net income or loss from rental properties. When calculating the partnership's net rental property income or loss, you need to consider Australian rent, foreign rent, and net rental income or loss distributed from other partnerships.
Net rental property losses occur when the amount of allowable deductions you claim for the partnership's rental properties is greater than the gross rental income the partnership receives.
Capital gains or losses made in regard to a rental property are not included in the partnership’s net rental property income or loss.
If the partnership earned rental income or claimed rental deductions, you must complete item 53 – label H and item 54 – label K showing each partner's share of net rental property income or loss.
Answering this question
Completing item 53 – label H Net rental property income or loss.
Before completing this question, first complete item 9 Rent and item 23 Other assessable foreign source income. Then follow the steps below to work out the amount.
Step 1
Use the worksheet below to list all rental income and deductions and then calculate the net rental property income or loss. Write a loss as a negative number.
Step 2
Write the result from step 1 at item 53 – label H.
Step 3
Write each partner's share of net rental property income or loss at item 53 – label K.
|
Row |
Calculation element |
Amount $ |
|---|---|---|
|
a |
Net rental property income shown at item 9 Rent. Show a loss as a negative number. |
$ |
|
b |
Net foreign rental property income or loss included at item 23 Other assessable foreign source income – label V. Show a loss as a negative number. |
$ |
|
c |
If applicable, write your partnership's share of net rental property income or loss from other partnerships shown on the statement of distribution from the other partnership. Show a loss as a negative number. |
$ |
|
d |
Add up values in rows a to c. |
$ |
|
e |
Any other deductions relating to a rental property (including deductions at item 18 – label Q) |
$ |
|
f |
Take row e away from row d. Show a loss as negative number. |
$ |
Show the amount at row f at item 53 – label H. If the amount is a loss, write L in the box on the right-hand side of item 53 – label H.
Statement of distribution
Once you have shown the net rental property income or loss at item 53, you also need to show each partner's share of the net rental property income or loss at item 54 Statement of distribution – label K.
Continue to: Statement of distribution – item 54