These instructions will help you complete the Partnership tax return 2014. 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?
Small business concessions: changes to simpler depreciation rules
The Government announced that it would make changes to small business concessions. At the time of printing these changes had not become law. Go to ato.gov.au/newlegislation for information about the progress of this legislation.
Claim only one set of franking credits: don’t engage in dividend washing
The dividend washing integrity rule applies from 1 July 2013. The integrity rule prevents you from claiming franking credits where you have received a dividend as a result of dividend washing.
Dividend washing occurs where you, or an entity connected to you, claim two sets of franking credits by:
- selling shares that are held on the Australian Securities Exchange (ASX) and have become ‘ex-dividend’, and then
- purchasing some substantially identical shares using a special ASX trading market.
The Commissioner may also apply the anti-avoidance legislation to deny franking credit benefits to any dividend washing transactions.
See ato.gov.au/dividendwashing for more information.
Pre-existing foreign losses
Prior to 2013–14, transitional rules restricted deductions for the foreign loss component of a pre-existing tax loss. From 2013–14 onwards, these deduction limits do not apply. For more information on pre-existing foreign losses, see Changes to foreign loss quarantining and foreign tax credit calculation rules - overview.
Related party debt and Limited recourse debt
As part of the 2012 Budget, the Government announced its intention to amend the law to provide a more consistent tax treatment for bad debts between related parties, irrespective of whether they are members of a tax consolidated group. The measure will ensure that where the debtor and creditor are related parties, and a corresponding debt is terminated (written-off) or forgiven after 7.30pm on 8 May 2012:
- the creditor will be denied tax relief for the bad debt written-off, and
- the corresponding gain to the debtor will not be taxed.
This will affect entities that are related parties but are not wholly within the same tax consolidated group.
The limited recourse debt provisions will also be clarified. This will ensure tax deductions are not available for capital expenditure on assets that have been financed by limited recourse debt, to the extent that the taxpayer is not effectively at risk for the expenditure and does not make an economic loss.
At the time of publication these changes had not become law. For more information, see Bad debts: Ensuring a consistent treatment in related financing arrangements.