14 Other Australian income
This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.
End of attention
Show at O the total amount of other Australian income.
If the amount is a loss, print L in the box at the right of the amount. The following are some examples of the amounts to be included at O.
Gains on the disposal of traditional securities
Show at O any gains on the disposal or redemption of a traditional security which are assessable under 26BB of ITAA 1936.
For more information about gains and losses on traditional securities, including traditional securities that are convertible notes or exchangeable notes, see You and your shares 2011-12.
Bonuses from life insurance companies and friendly societies
Life insurance policies are issued by life insurance companies and friendly societies.
If, during the year ended 30 June 2012, the trust received any bonuses or other amounts in the nature of bonuses on the maturity, forfeiture, partial or full surrender of a short-term life insurance policy taken out after 7 December 1983, you may need to show the amount at O.
A trust is regarded as having received a bonus if it reinvests or otherwise deals with the bonus during the income year.
Do not include the amount shown on a bonus certificate if the trust:
- received it because of death, accident, illness or other disability suffered by the person on whose life the policy was effected
- received it under a policy held by a complying superannuation fund or scheme, a complying approved deposit fund or a pooled superannuation trust
- can show that the amount was received because of serious financial difficulties
- received a bonus certificate in respect of an amount allocated to increase the amount receivable on surrender or maturity.
If the policy has a date of commencement of risk on or before 7 December 1983, any bonuses received this year are not assessable.
If the policy has a date of commencement of risk after 7 December 1983, the bonus is included in assessable income as follows:
- if received during the first eight years after the date of commencement of risk of the policy, any bonus is included in full
- if received in the ninth-year, two-thirds of the bonus amount is included
- if received in the 10th year, one-third of the bonus amount is included and
- any amounts received after the 10th year are not included.
If, during the term of the policy, the amount of a premium increases by more than 25% over the previous year's premium, the policy is taken to have started again with a commencement date at the beginning of the policy year in which the premium increased.
The beneficiary or trustee may, on their own tax return, claim a tax offset for a bonus or any other amount in the nature of a bonus included in the income if the organisation issuing the life policy is a:
- life insurance company that pays tax on the income from which the amount was paid, or
- friendly society.
The tax offset for the 2011-12 income year is equal to 30 cents in each dollar.
Include the bonus or other amount in the nature of a bonus in the calculation of net income or loss of the trust and apportion it among the beneficiaries in the same ratio as they share in that net income or loss.
If the trust received assessable bonuses from a life insurance company or friendly society, include the total amount at O. To ensure the tax offset is allowed, provide a statement showing the amounts from the life insurance company and friendly society life insurance policies - attach the statement to the tax return. Print X in the Yes box at Have you attached any 'other attachments'? at the top of page 1 of the tax return.
If a bonus or other amount in the nature of a bonus is included at O, or an amount was not included because of the circumstances under which it was received, keep a record of the following:
- the type of policy
- the name of the issuing organisation
- the policy number
- the date the policy was taken out
- the bonus statement or advice
- for each amount received
- the date received
- the nature of each amount, for example, bonus, loan or withdrawal
the circumstances under which each amount was received - for example, partial surrender of policy, serious financial difficulties, death, accident, illness or other disability
- the basis of calculation of the amount included.
For more information on bonuses received from certain life insurance policies, see Taxation Ruling IT 2346 - Income tax: bonuses paid on certain life assurance policies - section 26AH - interpretation and operation.
For more information on amounts switched between investment options for the same life insurance policy, see TD 94/82 Income tax: does section 26AH of the Income Tax Assessment Act 1936 apply when investment options are 'switched' under an eligible policy?
Bonuses credited from friendly society income bonds
Include bonuses received from friendly society income bonds at O. The statement of distribution issued by friendly societies to income bond holders will advise the amount that should be included as income. Do not include these amounts in the calculation of the tax offset applicable to bonuses from life insurance policies.
Add backs: Listed investment company (LIC) capital gain
If the trust receives or is entitled to receive income from another trust or a distribution from a partnership which advises it has claimed a deduction for a LIC capital gain amount, the trust is required to add back as income an amount equivalent to its share of the deduction allowed to the partnership or other trust.
For information on royalty income shown at O, see appendix 2.
Foreign exchange gains or losses
Show at O assessable Australian source foreign exchange gains or deductible losses that you have not included elsewhere, such as in item 5 Business income and expenses. If the total amount at O is a loss, print L in the box at the right of the amount.
For more information on how to calculate foreign exchange gains and losses, see Foreign exchange (forex): questions and answers.
As foreign currency is a CGT asset, the capital gains tax provisions can apply to any capital gain or capital loss made on a CGT event. Any capital gain would generally be ignored or reduced to prevent double taxation if the gain was assessable under the TOFA rules or Division 775 of the ITAA 1997.
If a trust has made a foreign exchange gain or loss which is subject to CGT, show the capital gain or capital loss at A Net capital gain item 21.
Excepted net income
Show at Excepted net income and include at O the excepted net income received, excluding net capital gains that are included at A Net capital gain item 21.
Provide a statement on a separate sheet of paper:
- detailing the distribution of excepted income to each beneficiary, and
- listing each beneficiary who is considered to be an excepted person, giving supporting reasons.
Attach this statement 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.
For an explanation of excepted income and excepted person, see appendix 10.
TOFA amounts from financial arrangements
If the TOFA rules apply to calculate an assessable gain or deductible for loss on the trust's financial arrangements, include at this item those assessable gains and any assessable TOFA transitional balancing adjustments relating to existing financial arrangements.
TOFA amounts that have been included elsewhere should not be included here, for example amounts that have already been included at:
- SNet income or loss from business item 5
- A Distribution from partnerships item 8
- Z Distribution from trusts item 8
- JGross interest item 11
- KUnfranked amount item 12
- BGross other assessable foreign source income item 23.
If the TOFA rules apply to the trust and the other Australian income shown at O includes an amount which is brought to account under the TOFA rules, also complete item 31 Taxation of financial arrangements (TOFA).
For more information, see Guide to the taxation of financial arrangements (TOFA).
Last modified: 12 Feb 2019QC 28037