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  • Trust share of net small business income less deductions attributable to that share

    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

    Did either of the following apply:

    • your trust distribution or share of net income included a share of net small business income
    • you had a farm management repayment or other amount you received as a beneficiary in a small business entity?

    No – You are not eligible for the small business income tax offset for trusts.

    Yes – You may be entitled to the small business income tax offset. Read on.

    Amounts you show at this field are not included in your income. They are only used for the purpose of working out your small business income tax offset.

    Your statement of distribution or advice from the trustee should include details of your ‘Share of net small business income’ from each trust that is a small business entity.

    You are entitled to the offset only in respect of your share of net small business income from a small business entity trust in which you are a beneficiary, where the business income was derived by that trust from carrying on its own business activities.

    You must reduce your share of net small business income and other beneficiary income amounts by any deductions you are entitled to, to the extent they are attributable to that share of income or other income amounts.

    The deductions you can claim against your share of net small business income are explained at Trusts. Include any deductions for farm management deposits you made as a beneficiary.

    Your deductions from Trusts plus your deductible farm management deposits cannot be greater than your share of net small business income from that trust.

    At this field also include any:

    • farm management repayments included in your income this year as a beneficiary
    • other business income that is only included in your income because you were a beneficiary, for example, a recoupment or reimbursement of a deduction that you previously claimed as a beneficiary.

    Do not include interest on your farm management deposits at this field.

    Any deductions that are attributable to a farm management repayment, or other business income, cannot be greater than the amount to which the deduction relates.

    Do not reduce your share of net small business income or other income amounts by any of the following deductions:

    • tax-related expenses
    • gifts or contributions
    • personal superannuation contributions.

    For more information, see Small business income tax offset.

    Working out your trust share of net small business income less deductions attributable to that share

    To work out your trust share of net small business income less deductions attributable to that share, use step-by-step instructions and worksheet provided below.

    If the trust made an overall loss, treat your share of net small business income from that trust as zero.

    If you are a beneficiary who is a minor (under 18 years old and you are not an excepted person) you are not entitled to this offset.

    If you are the beneficiary of a discretionary trust you would not normally be able to claim a deduction for expenses you incurred in relation to your share of any net income of the trust under the general deduction provisions. This is because at the time you incurred the expense, you would not have been entitled to any income of the trust.

    Step 1

    Add up all your ‘share of net small business income' amounts that relate to trust distributions you have shown at Trusts and at Other foreign income and show this at row a.

    Step 2

    Show any farm management repayments from 'Early repayments – natural disaster and drought' or 'Other repayments' that relate to your trust share at row b.

    Step 3

    Show any other business income amounts included in your income because you were a beneficiary at row c.

    Step 4

    Add together rows a, b and c and show the result at row d.

    Step 5

    Show any deductible farm management deposits from 'Deductible deposits' that are attributable to your trust share of net small business income at row e.

    Step 6

    Show any deductions claimed at Other deductions at Trusts that are attributable to your trust share at row f.

    Step 7

    Show any deductions that relate to your farm management repayments from 'Early repayments – natural disaster and drought' or 'Other repayments' or other beneficiary business amounts at row g.

    Step 8

    Add together rows e, f and g then show the total at row h.

    Step 9

    Subtract row h from row d and show this at row i. If the result is a loss, enter 0.

    The amount at row i is the amount you need to show at Trust share of net small business income less deductions attributable to that share.

    Worksheet

    Row

    Calculation

    Amount

    a

    Trust share of net small business income from trusts

     

    b

    Farm management repayments

     

    c

    Other business income because you were a beneficiary

     

    d

    Add rows a, b and c and show the result at row d.

     

    e

    Farm management deposits

     

    f

    Other deductions claimed at Trusts

     

    g

    Deductions that relate to your farm management repayment or other beneficiary business income

     

    h

    Add up rows e, f and g then show the total at row h.

     

    i

    Subtract row h from row d and show this at row i.

    If the result is a loss, enter 0.

    This is your trust share of net small business income less deductions attributable to that share.

     

      Last modified: 26 Jun 2019QC 58953