These instructions will help you complete the Partnership tax return 2016. 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.
Expanding accelerated depreciation for small businesses
New laws have passed that allow small businesses to claim an immediate deduction for assets they first acquire and start to use, or have installed ready for use, provided each depreciable asset costs less than $20,000. This will temporarily replace the previous instant asset write-off threshold of $1,000.
This measure started 7.30pm (AEST) 12 May 2015 and will end on 30 June 2017.
The balance of the general small business pool is also immediately deductible if the balance is less than $20,000 at the end of an income year that ends on or after 12 May 2015 and on or before 30 June 2017 (including an existing general small business pool).
The 'lock out' laws have also been suspended for the simplified depreciation rules (these prevent small businesses from re-entering the simplified depreciation regime for five years if they have opted out) until the end of 30 June 2017.
Immediate deductibility for start-up costs
Section 40-880 of the Income Tax Assessment Act 1997 (ITAA 1997) allows for certain start-up expenses, including costs associated with raising capital, to be immediately deductible where they are incurred by a small business entity or an entity that is not in business. These provisions apply from 2015–16 onwards.
Small business income tax offset
From 2015–16, a partner who is an individual may be entitled to a tax offset on the tax payable on their share of net small business income earned by a partnership that is a small business entity.
Partnerships that are small business entities will need to work out the partnership's net small business income and the partner's share of that income.
An individual who was not in a partnership carrying on a business does not need to lodge a partnership tax return where the only income derived jointly (or in common) with another person was:
- rent from a jointly owned investment property
- interest from a jointly held account
- dividends from jointly held shares.
In these instances, each individual shows their share of the income and expenses at the appropriate items on their own individual tax return.