Partnership and trust distributions - common mistakes to avoid 2011

You should read this fact sheet if your clients are either of the following:

• partners in a partnership
• trustees or beneficiaries of a trust.

Do you need to lodge a trust or partnership return?

Warning:

This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

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If required by the Commissioner of Taxation, trusts need to lodge a trust tax return irrespective of the amount of income derived or distributions made. A trust that was a subsidiary member of a consolidated group for the full income year does not have to lodge a trust tax return.

Partnerships need to lodge an annual partnership tax return. A partnership tax return is not necessary if one of the following applies:

• the partnership was a subsidiary member of a consolidated group for the full income year
• we approved an application for exemption from lodging a partnership tax return
• the partnership's only income was rent, interest or dividends derived jointly (or in common) and it was not carrying on a business (each partner shows their share of the rent, interest or dividends and the associated expenses at the appropriate items on their individual tax return).

If your client is a partnership that does not have to lodge a tax return, you should either:

• lodge a client update (CU) form
• advise us through the Online services for agents that the partnership does not need to lodge.

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For more information, refer to:

• Trust tax return instructions 2011
• Partnership tax return instructions 2011

End of further information