Statement of distribution – item 54

What to include in the 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 their own tax return at the following:

Individual

• item 13 Partnerships and trusts in the Tax return for individuals (supplementary section) 2023

Company

• item 6 Calculation of total profit or loss in the Company tax return 2023

Trust

• item 8 Partnerships and trusts in the Trust tax return 2023, 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
• foreign income tax offsets
• early stage venture capital limited partnership tax offset
• early stage investor tax offset

Each partner will show this income, credit or offset on their own tax return at the following:

• for an individual tax return              
  • question 18 Capital gains
  • question 19 Foreign entities
  • question 20 Foreign source income and foreign assets or property
  • question T7 Early stage venture capital limited partnership
  • question T8 Early stage investor
   
• for a company tax return              
  • item 7 Reconciliation to taxable income or loss
  • item 20 Foreign income tax offset
  • item 22 Early stage venture capital limited partnership tax offset
  • item 23 Early stage investor tax offset
   
• for a trust tax return              
  • item 21 Capital gains
  • item 22 Attributed foreign income
  • item 23 Other assessable foreign source income
  • item 54 Non-refundable carry forward tax offsets.
   

For more information, see Guide to capital gains tax 2023.

More than 3 partners

If the partnership has more than 3 partners, photocopy pages 10 and 11 of the tax return for each additional partner before filling them in.

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

Complete the statement of distribution with the following details:

• Partner details
• A Share of income, Primary production and B – Share of income, Non-primary production
• C Credit for tax withheld where ABN not quoted
• L Franked distributions
• D Franking credit
• E TFN amounts withheld
• O Share of credit for TFN amounts withheld from payments from closely held trusts
• F Credit for tax withheld – foreign resident withholding (excluding capital gains)
• G Australian franking credits from a New Zealand franking company
• H Share of net small business income
• I Share of National rental affordability scheme tax offset
• J Share of net financial investment income or loss
• K Share of net rental property income or loss
• M Share of exploration credits
• Real and effective control of share in partnership income

Partner details

For each partner's individual statement of distribution, show the:

• individual name or non-individual name
• residential or business address
• TFN
• individual’s date of birth
• non-individual’s ABN.

Show the full name and TFN or 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 label B. Franked distributions should be shown at label L.

If a loss is distributed, print L in the box at the right of the amount.

If you showed an amount at item 32 Non-concessional MIT income (NCMI):

A1 – PP – NCMI

Show at label A1 the total share of primary production NCMI for the relevant partner of the partnership.

The total amount distributed to all partners at label A1 cannot be greater than the total of 32A, 32E and 32G at item 32 Non-concessional MIT income (NCMI).

A2 – PP – Excluded from NCMI

Show at label A2 the total share primary production income excluded from NCMI for the relevant partner of the partnership.

The total distributed to all partners at label A2 cannot be greater than the total of 32B, 32F and 32H at item 32 Non-concessional MIT income (NCMI).

B1 – Non-PP – NCMI

Show at label B1 the total share of non-primary production NCMI for the relevant partner of the partnership.

The total amount distributed to all partners at label B1 cannot be greater than the total of 32C, 32I and 32K at item 32 Non-concessional MIT income (NCMI).

B2 – Non-PP – Excluded from NCMI

Show at label B2 the total share of non-primary production income excluded from NCMI for the relevant partner of the partnership.

The total amount distributed to all partners at label B2 cannot be greater than the total of 32D, 32J and 32L at item 32 Non-concessional MIT income (NCMI).

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 label C for each completed distribution statement equals the sum of any credit claimed at:

• item 6 Tax withheld where ABN not quoted – label T
• item 8 Share of credit for tax withheld where ABN not quoted – label C.

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 label D for each completed distribution statement must equal the sum of franking credits claimed at:

• item 8 Share of franking credits from franked distributions – label D
• item 12 Franking credit – label M.

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 label E for each completed distribution statement must equal the sum of TFN amounts withheld on interest, dividends and unit trust distribution at:

• item 8 Share of credit for TFN amounts withheld from interest, dividends and unit trust distributions – label E
• item 11 TFN amounts withheld from gross interest – label I
• item 12 TFN amounts withheld from dividends – label N.

O Share of credit for TFN amounts withheld from payments from closely held trusts

Show at label 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 item 8 – label O, 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 (excluding capital gains)

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 item 6 – label U and item 8 – label U.

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 label H for each completed distribution statement must equal the amount shown at item 5 Net small business income – label V.

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 this 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 label I for each completed distribution statement must equal the amount of NRAS tax offset entitlement shown at item 51 – label F 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 label J for each completed distribution statement must equal the amount shown at item 53 – label G.

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 label K for each completed distribution statement must equal the amount shown at item 53 – label H.

M Share of exploration credits

Show each partner’s share of exploration credits. Show whole dollars only. The aggregate of each amount shown at label M 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:

• is aged 18 years or over on the last day of the partnership income year, and
• does not have a real and effective control and disposal of part or the whole of their share of the partnership net income

further tax is payable by that partner.

Real and effective control depends on the constitution and control of the partnership and the conduct of its operations. Broadly, a partner lacks the real and effective control if, by reason of any of the matters mentioned in the preceding sentence, they must allow their share to be dealt with in a particular way so that they can't, of their own will, deal with it in another way. See section 94 of the ITAA 1936.

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.

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