Partners who have an amount attributable to a dividend included in their net income or loss from a partnership



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

End of attention

When calculating its net income or loss for tax purposes, a partnership that is paid or credited a franked dividend includes both the amount of the dividend and the franking credit in its assessable income. This is subject to the partnership satisfying the holding period rule and other rules contained in the provisions dealing with franked dividends.

If a share of the net income or loss of a partnership shown at item 13 Partnership and trusts on your tax return (supplementary section) is attributable to a franked dividend, you may be entitled to claim a franking tax offset, which is your share of the partnership's franking credit arising from that dividend.

You are not entitled to a franking tax offset if you do not satisfy the holding period rule or related payments rule in relation to your interest in the shares held by the partnership, or the partnership does not satisfy those rules in relation to the shares.

If the partnership satisfies the rules in relation to the shares and the small shareholder exemption applies to you, you do not have to satisfy the holding period rule.

For more information, see When you are not entitled to claim a franking tax offset.

Example 10: Partnerships and trusts


Franked dividend


Franking credit, non-cash


Net income of partnership


Individual partner - 1/2 share

Taxable 1/2 share of net income of the partnership


Other assessable income


Total taxable income


Gross tax at 2011-12 rates


less 1/2 of total franking tax offset


Tax payable*


*This does not include any liability for the Medicare levy.

End of example
Last modified: 04 Mar 2016QC 25651