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Show at I the gross distribution from all partnerships. If the distribution includes an amount of foreign income, including New Zealand franking company dividends and supplementary dividends, include that portion of the distribution at D1 Gross foreign income and take it into account in calculating D Net foreign income.
If the amount calculated is a loss, print L in the Loss box at the right of the amount.
Include any amounts subject to foreign resident withholding that were distributed to the fund from a partnership. Also include the fund's share of credit from foreign resident withholding. A credit can be claimed for the fund's share of credit from foreign resident withholding in the calculation statement at F2 Credit: foreign resident withholding item 12.
If a distribution includes franked dividends (including franked non-share dividends), determine the fund's entitlement to a franking tax offset.
The fund is not entitled to a franking tax offset if:
- the relevant interest is not held at risk as required under the holding period and related payment rules, or
- there is some other manipulation of the imputation system, or
- the gross distribution from the partnership is exempt income or non-assessable non-exempt income (other than because of certain provisions mentioned in section 207-110 of the ITAA 1997).
- If the fund is entitled to a franking tax offset, 'gross up' the distribution to include any attached franking credit. If your fund is a complying superannuation fund, complying ADF or PST, show the amount of franking credit attached to such dividends at F4 Credit: refundable franking credits item 12. If your fund is a non-complying superannuation fund or non-complying ADF, include the amount of franking credits attached to such dividends at C2 Credit: rebates and offsets item 12.
If the fund is not entitled to a franking tax offset, simply record the amount of the franked dividend at I and do not record the franking credit attached to the dividend anywhere in the fund tax return.
To the extent that family trust distribution tax (FTDT) has been paid on income received by the fund from partnerships, exclude that amount from the assessable income of the fund (section 271-105 of Schedule 2F to the Income Tax Assessment Act 1936 (ITAA 1936)).
If the fund's share of partnership income includes an amount received indirectly from a closely held trust on which trustee beneficiary non-disclosure tax (TBNT) has been paid, do not include the amount in the fund's assessable income.
Any losses or outgoings incurred in deriving an amount which is excluded from assessable income because FTDT or TBNT has been paid are not deductible. A tax offset cannot be claimed by the fund for any franking credits attributable to the whole or a part of a dividend that is excluded from assessable income under these provisions.
Even if the TOFA rules apply to the fund, show at I all gross distributions from partnerships. This includes amounts from financial arrangements subject to the TOFA rules.
If what you show at I includes an amount brought to account under the TOFA rules, also complete item 16 Taxation of financial arrangements (TOFA).
For more information, see Guide to the taxation of financial arrangements (TOFA) rules.
Keep a record of the:
- full name of the partnership
- TFN of the partnership if known
- amount of income.
Notes for completing J Unfranked dividend amount, K Franked dividend amount, L Dividend franking credit.
Dividends or non-share dividends that the fund receives from Australian payers may carry franking credits. Such dividends are called franked dividends, and the franking credits they carry reflect the amount of tax paid by the payer.
Dividends and non-share dividends where no tax has been paid are called unfranked dividends.
Add all the franked and unfranked dividend amounts received and all the franking credits to determine the fund's assessable income from these dividends.
Non-share dividends are treated in the same way as dividends. Show the amount of the non-share dividends, whether franked or unfranked, and any amount of franking credit attached to those dividends, at the appropriate place on the tax return as if they were for shares.
Non-share dividends are returns paid on non-share equity interests. These interests are not shares in legal form but are treated in the same way as shares under the debt and equity rules.
To the extent that family trust distribution tax has been paid on a dividend (including a non-share dividend) paid or credited to the fund by a company that has made an interposed entity election, do not include that amount in the assessable income of the fund (section 271-105 of Schedule 2F to the ITAA 1936).
- Any losses or outgoings that the fund incurred in deriving an amount that is excluded from assessable income under section 271-105 of Schedule 2F are not deductible.
- The fund cannot claim a credit (nor a tax offset) for any franking credit attributable to the whole or a portion of the dividend that is excluded from assessable income under section 271-105 of Schedule 2F.
If the fund received a dividend from a private company, you must establish whether the dividend is classified as non-arm's length income.
If such a dividend is considered non-arm's length income, show the amount at U Net non-arm's length income.
J, K and L refer to dividends derived from investments in resident entities (including listed investment companies). Dividends that form part of a trust distribution must be written at N or O and P.
Last modified: 13 Feb 2019QC 28016