Did either of the following apply:
- your partnership 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 partner in a small business entity?
No – You are not eligible for the small business income tax offset for partnerships.
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 partnership should include details of your ‘Share of net small business income’ from each partnership that is a small business entity. If a partnership made an overall loss, you are not entitled to a tax offset in relation to that share of net small business income.
You are entitled to the offset only in respect of your share of net small business income from a small business entity partnership in which you are a partner, where the business income was derived by that partnership from carrying on its own business activities.
You must reduce your share of net small business income and other partner 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 Partnerships. Include any deductions for farm management deposits you made as a partner.
Your deductions from Partnerships plus your deductible farm management deposits cannot be greater than your share of net small business income from that partnership.
At this field also include any:
- farm management repayments included in your income this year as a partner
- other business income that is only included in your income because you were a partner, for example, a recoupment or reimbursement of a deduction that you previously claimed as a partner.
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 partnership share of net small business income less deductions attributable to that share
To work out your partnership share of net small business income less deductions attributable to that share, use step-by-step instructions and worksheet below.
If you are a partner in a partnership the statement of distribution or advice should also include details of any business loss activities. If the partnership made an overall loss, treat your share of net small business income from that partnership as zero.
If the partnership carried on more than one business activity and one or more activities made a loss, the non-commercial business loss rules apply to that loss activity. If overall the partnership made a profit but your share of the partnership's net small business income has been reduced (but not to zero or below) by a loss you may be required to adjust your share of the partnership's net small business income.
Step 1
Add up all your 'share of net small business income' amounts that relate to partnership distributions at Partnerships and at Other foreign income and show this at row a.
Step 2
If the following applies show your share of that loss at row b:
- your distribution from a partnership included a share of a business loss that was not deductible this year due to the non-commercial loss rules, and
- your share of that loss reduced a 'share of net small business income' amount included at row a (but not to zero or below).
Step 3
Add up rows a and b and show the result at row c.
Step 4
Show any farm management repayments from 'Early repayments – natural disaster and drought' or 'Other repayments' that relate to your partnership share at row d.
Step 5
Show any other business income amounts included in your income because you were a partner at row e.
Step 6
Add up rows c, d and e and show the result at row f.
Step 7
Show any deductible farm management deposits from 'Deductible deposits' that are attributable to your partnership share of net small business income at row g.
Step 8
Show any Landcare operations and business deduction for decline in value of water facility, fencing asset and fodder storage asset and Landcare operations expenses claimed at Partnerships that are attributable to your partnership share at row h.
Step 9
Show any Other deductions claimed at Partnerships that are attributable to your partnership share at row i.
Step 10
Show any deductions that relate to your farm management repayments or other partner business amounts at row j.
Step 11
Add together rows g, h, i and j then show the total at row k.
Step 12
Subtract row k from row f and show this at row l. If the result is a loss, enter 0.
The amount at row l is the amount you need to show at Partnership share of net small business income less deductions attributable to that share.