Show the total amount of other Australian income. If the amount is a loss, print L in the box at the right of the amount.
Show at label O any gains on the disposal or redemption of a traditional security which are assessable income under section 26BB of the 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 2023.
If, during the year ended 30 June 2023, the partnership received 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 on or after 28 August 1982, you may need to show the amount at label O.
Life insurance policies are issued by life insurance companies and friendly societies.
A partnership is regarded as having received a bonus if it re-invests or otherwise deals with the bonus during the income year.
Do not include the amount shown on a bonus certificate if the partnership:
- 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 the trustee of a complying superannuation fund, 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 27 August 1982, any bonuses received this year are not assessable.
If the policy has a date of commencement of risk after 7 December 1983, any bonus is included in assessable income as follows:
- if received during the first 8 years after the date of commencement of risk of the policy, the bonus is included in full
- if received in the ninth year, two-thirds of the bonus amount is included
- if received in the tenth year, one-third of the bonus amount is included
- Amounts received after the tenth 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 partner 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 a partner may claim on their own tax return for 2022–23 is equal to 30c 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 partnership and apportion it among the partners in the same ratio as they share in that net income or loss of the partnership.
If the partnership received assessable bonuses from a life insurance company or friendly society, include the total amount at label 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 label O, or an amount was not included because of the circumstances under which it was received, keep a record of the:
- type of policy
- name of the issuing organisation
- policy number
- date the policy was taken out
- bonus statement or advice
- date that each amount was received
- nature of each amount, for example, bonus, loan or withdrawal
- circumstances under which each amount was received, for example, partial surrender of policy, serious financial difficulties, death, accident, illness or other disability
- basis of calculation of the amount included.
For more information on:
- bonuses received from certain life insurance policies, see IT 2346 Income tax: bonuses paid on certain life assurance policies – section 26AH – interpretation and operation.
- 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?
Include bonuses received from friendly society income bonds at label O. The distribution statement 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.
If a distribution is received from another partnership or trust which advises it has claimed a deduction for a LIC capital gain amount, the partnership is required to add back as income its share of the deduction allowed to the other partnership or trust.
For information on royalty income shown at label O, see Appendix 2.
Show at label O the assessable Australian source foreign exchange (forex) gains or deductible losses that you have not already included at any other label, for example, a label in item 5 Business income and expenses. If the total amount at label O is a loss, print L in the box at the right of the amount.
For more information on how to calculate forex gains and losses, see Foreign exchange gains and losses.
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 partnership has made a foreign exchange gain or loss which is subject to CGT, each partner must include their share of the capital gain or capital loss on their own tax return.
If the TOFA rules apply to calculate an assessable gain or deductible loss on the partnership’s financial arrangements, include at this item those assessable gains relating to the financial arrangements.
TOFA amounts that have been included elsewhere should not be included here, for example, amounts that have already been included at:
- item 5 – label S Net income or loss from business
- item 8 – label A Distribution from partnerships
- item 8 – label Z Share of net income from trusts
- item 11 – label J Gross interest
- item 12 – label K Unfranked amount
- item 23 – label B Gross other assessable foreign source income.
If the TOFA rules apply to the partnership and the other Australian income shown at label O or any other income label 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).
Show at item 15 the total of all Australian income.
If this amount is a loss, print L in the box at the right of the amount.
Continue to: Deductions – items 16 to 20