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  • What to report at net foreign income labels

    Net foreign income (gross foreign income less expenses) is from overseas business and investments your client made as a non-resident.

    You must include net foreign income here.

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    Net business income

    If your client derived non-resident foreign income or incurred a foreign loss from any business carried on overseas include it here. This includes:

    • income or loss from being a sole trader
    • income or a loss from a primary production business
    • income or loss of an independent contractor working under a labour hire arrangement
    • income or loss as a performing artist in a promotional activity
    • any other business income or loss.

    See also:

    • Business and professional items
    Total personal services income

    Complete this field if your client received foreign income for personal services provided as a non-resident sole trader and they either:

    • did not receive a personal services business determination in relation to their personal services income (PSI)
    • did not satisfy the results test
    • did not satisfy at least one of the other three personal services business tests (if less than 80% of their PSI came from each client).

    Personal services income is income that is mainly a reward for an individual's personal efforts or skills. To work out whether your client's income is personal services income you can use the Personal services income toolThis link opens in a new window or see Personal services income for more information. To work out the net personal services income to report here, see Business and professional items.

    Net partnership and trust income

    If your client's non-resident foreign income is from partnerships or trusts, include it here. Include your client's share of both:

    • primary production partnership income or loss
    • non-primary production partnership income or loss.

    If the partnership in which your client was a partner paid them salary, wages or allowances, you must show that income here.

    If they received, or were entitled to, a distribution of trust income, you must enter that amount here.

    Net capital gains

    If the non-resident foreign income includes a capital gain or a capital loss made for an asset that is not taxable Australian property your client holds or held during the year, include it here.

    Under Australian tax law, for most CGT events, your client makes:

    • a capital gain if the amount of money and property they received, or were entitled to receive, from the CGT event was more than the cost base of the asset; they may then have to pay tax on the capital gain
    • a capital loss if the amount of money and property they received, or were entitled to receive, from the CGT event was less than the reduced cost base of the asset.

    There is a wide range of CGT events. The most common CGT event happens when you sell or give away a CGT asset.

    See also:

    • Capital gains or losses
    Net rent

    Rental income

    This is the non-resident foreign income earned when your client rents out their property (including renting out a room through a sharing economy website or app). You must include any bond money retained in place of rent or kept because of damage to the property requiring repairs. An insurance payout for lost rent, or a reimbursement of any rental expenses claimed in the relevant Australian income year, or claimed in an earlier year, must also be included as income.

    Rental expenses

    You can claim expenses relating to your client's rental property but only for the period the property was rented or available for rent, for example, advertised for rent.

    Expenses can include:

    • advertising for tenants
    • bank charges
    • body corporate fees
    • borrowing expenses
    • council rates
    • decline in value of depreciating assets
    • gardening and lawn mowing
    • insurance
    • land tax
    • pest control
    • property agent fees or commissions
    • repairs and maintenance
    • stationery
    • phone
    • water charges
    • travel undertaken to inspect the property or to collect the rent.

    If part of the property is used to earn rent, your client can claim expenses relating to only that part of the property. You will need to work out a reasonable basis to apportion the claim.

    See also:

    • 21 Rent
    Last modified: 01 Jul 2020QC 52826