Instructions to complete item 12 in the tax return relating to dividends.
When to show dividends
If the only income you derived jointly (or in common) with another person was:
- rent from a jointly owned property
- interest from a jointly held account
- dividends from jointly held shares
and you were not in a partnership carrying on a business, do not show any dividend income at this item. Show your share of the dividend income at item 11 Dividends on your Tax return for individuals 2023.
If the partnership is a shareholder or holder of a non-share equity interest in a company (including a LIC) or held units in a corporate unit trust or a public trading trust, that entity gives the partnership a dividend or non-share dividend statement. The statement is likely to include the:
- name of the entity making the distribution
- date on which the distribution was made
- amount of the distribution
- amount of franking credit allocated to the distribution
- franking percentage for the distribution
- amount of any withholding tax has been deducted from the distribution
- name of the shareholder
- if the distribution is unfranked, a statement to that effect, and
- if the distribution is franked, the franked amount and the unfranked amount of the distribution.
If a franked distribution has been received with an associated distribution statement that does not distinguish between the franked and unfranked portions of the dividend, include the total dividend amount at label L Franked amount and include any attached franking credits at label M Franking credit.
Show only amounts received from Australian companies, corporate limited partnerships, corporate unit trusts and public trading trusts.
Show dividends that are part of a distribution from a managed investment fund at item 8 Partnerships and trusts.
Show dividends received from foreign sources, including dividends from a New Zealand franking company with Australian franking credits attached, at item 23 Other assessable foreign source income.
Copy details from all statements to Worksheet 4 and keep the worksheet with the partnership’s tax records.
If the partnership was paid a dividend by a LIC and the dividend advice statement shows a LIC capital gain amount, the partnership can claim a deduction of 50% of the LIC capital gain amount at item 16 Deductions relating to Australian investment income.
Dividends on which family trust distribution or trustee beneficiary non-disclosure tax has been paid
To the extent that Family trust distribution tax (FTDT) has been paid on a dividend paid or credited to the partnership by a company that has made an interposed entity election, that amount is excluded from the assessable income of the partnership under section 271-105 of Schedule 2F to the ITAA 1936. Do not show it at label K or L.
You can't claim a deduction for any losses or outgoings incurred in deriving an amount that is excluded from assessable income under section 271-105 and you can't claim a credit or tax offset for any franking credit attached to the non-assessable non-exempt portion of the dividend.
Accordingly, do not include any amount at label M for a franking credit attached to the whole or part of a dividend that is excluded under section 271-105. For more information on the circumstances in which FTDT is payable, see Family trust distribution tax.
If trustee beneficiary non-disclosure tax (TBNT) has been paid on a dividend that is included in a share of net income which the partnership is presently entitled to or which has been distributed to the partnership, then the dividend is not included in the assessable income of the partnership.
You can't claim a deduction for any losses or outgoings incurred in deriving these amounts that are excluded from assessable income, and you can't claim a tax offset for any franking credits attributable to the dividend.
For more information on dividends, franking credits and tax offset entitlements, see Appendix 1.
Unfranked amount
Show at label K the gross amount of unfranked dividends, and the unfranked amount of partially franked dividends, received before any TFN amounts were withheld.
If the TOFA rules apply to the partnership, include all unfranked dividends that were paid or credited to it by Australian companies in respect of financial arrangements subject to the TOFA rules at label K.
If the partnership is a holder, or an associate of a holder, of a share or non-share equity interest in a private company and it received:
- payments, loans or forgiveness of a debt from the company, directly or indirectly
- loans or forgiveness of a debt from a trustee, where the company has an unpaid present entitlement from the trust, or
- payments from a trustee which are attributable to certain unrealised gains, where the company has an unpaid present entitlement to the trust income
then the amounts of those payments (subject to distributable surplus and in the case of a trust the unpaid present entitlement), loans not repaid or debts forgiven are returned as an unfranked dividend unless they are specifically excluded under the provisions of Division 7A of Part III of the ITAA 1936, or the amount treated as a dividend is franked. Division 7A was amended to enable certain amounts treated as dividends to be franked. For example, a private company can frank an amount treated as a dividend that arises because of a family law obligation in certain circumstances.
Dividends paid under a demerger are generally not assessable dividends. Do not include a dividend paid under a demerger at label K unless the head entity of the demerger group has advised that it is an assessable dividend.
Franked amount
Show at label L the franked amount of franked dividends received before any TFN amounts were withheld.
If you have received a franked distribution with an associated distribution statement that does not distinguish between the franked and unfranked portions of the dividend, include the total dividend amount at label L and include any attached franking credits at label M.
Franking credit
Show at label M the amount of franking credits received directly from a paying company.
The amount at label M is distributed to the partners, and is allowed as a tax offset to reduce tax payable.
Do not show:
- franking credits if
- the partnership did not satisfy the holding period rule, and
- the related payments rule for the dividend, or the dividend washing integrity rule applies
(for more information, see Appendix 1)
- franking credits received indirectly through another partnership or a trust; show your share of franking credit from franked distributions at item 8 – label D.
- franking credits attached to distributions paid by a New Zealand franking company. If the partnership received franked distributions from a New Zealand franking company, see 23. Other assessable foreign source income.
TFN amounts withheld from dividends
Show at label N the total of TFN amounts withheld from dividends received, minus any refund of TFN amounts withheld.
We may check the franking amount shown at label K, L and M with our own records to determine accuracy. See Data-matching programs.
Continue to: 14. Other Australian income