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  • Introduction

    Attention

    Warning:

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

    End of attention

    These instructions will help you complete the Partnership tax return 2019. They are not a guide to income tax law. You may need to refer to other publications.

    When we say ‘you’ or ‘your business’ in these instructions, we mean either you as the partnership that conducts a business or you as the registered tax agent or partner responsible for completing the tax return.

    These instructions contain abbreviations for names or technical terms. Each term is spelt out in full the first time it is used and there is a list of abbreviations.

    What’s new?

    Changes to the thin capitalisation rules to prevent double gearing structures

    On 5 April 2019, changes were made to improve the integrity of the income tax law by modifying the thin capitalisation rules to prevent double gearing structures. Double gearing structures involve the use of multiple layers of ‘flow-through’ entities (such as trusts and partnerships) to issue debt against the same underlying asset.

    These changes apply to income years starting on or after 1 July 2018.

    The changes will affect entities with interests in trusts (other than public trading trusts) and partnerships, as the threshold for the purposes of the associate entity debt, associate entity equity, and the associate entity excess amounts has been reduced from 50% to 10%.

    The changes also affect how the arm’s length debt amount is calculated. To determine both the independent lender and independent borrower amounts of the test, an entity must consider the debt-to-equity ratios of any other entity in which it has an interest.

    For more information, see .Stapled structures.

    Expanding accelerated depreciation for small businesses and for medium sized business

    There have been changes to the instant asset write-off. The threshold has increased to $30,000, and has been extended to 30 June 2020.

    The instant asset write-off threshold now includes business with a turnover from $10 million to less than $50 million. These businesses can claim a deduction for the business portion of each asset that costs less than $30,000 (the instant asset write-off threshold) if they are purchased and first used or installed ready for use from 7.30pm (AEDT) 2 April 2019.

    For assets purchased for $30,000 or more, the general depreciation rules must be used.

    Small business (with a turnover of less than $10 million), can also continue to claim an immediate deduction for the business portion of each asset that costs less than the relevant instant asset write-off threshold that applies.

    The 'lock out' laws have also been suspended for the simplified depreciation rules (these prevent small businesses from re-entering the simplified depreciation regime for five years if they have opted out) until the end of 30 June 2020. For more information see small business entities.

    See also:

    Last modified: 30 May 2019QC 58661