Item 6 - Income Labels
Show all income amounts from the company's financial statements at labels B to R:
Amounts for this item must be entered in the Payment Summary Schedule (where the Income type is B and the Payment type is F) from where they integrate to label B, with the corresponding credit integrating to label H2 in the Calculation statement.
Click Label B to open the Payment summary schedule (PS).
You only need to complete this label if the company is a non-resident. An Australian resident should not include an amount, such as, foreign sourced income, at this label.
Do not include at this label amounts that are subject to a final withholding tax, for example, amounts subject to withholding tax under section 128B of the ITAA 1936. Include these amounts at label F Gross interest or label H Total dividends or label R Other gross income. A final withholding tax cannot be claimed at label H2 Credit for tax withheld - foreign resident withholding (excluding capital gains) in the Calculation statement.
Do not include any income distributions from other partnerships or trusts.
Foreign resident withholding (excluding capital gains) applies to payments made to foreign residents where the payment is:
for promoting or organising casino gaming junket activities
for entertainment or sports activities, or
under contract for the construction, installation and upgrading of buildings, plant and fixtures and for associated activities.
This withholding is not a final tax. A credit can be claimed in the Calculation Statement at label H2 Credit for tax withheld - foreign resident withholding (excluding capital gains).
Do NOT include at this label amounts subject to foreign resident withholding (excluding capital gains) that were distributed to the company from a partnership and/or trust. Show these at label D Gross distribution from partnerships or label E Gross distribution from trusts.
Any income included at label B which is not assessable in Australia should also be shown at item 7, label V -Exempt Income.
CCH References
22-000 Tax liability of non-residents
Show at this label the gross distribution from all partnerships including any share of franking credits attributable to dividends paid by an Australian Company.
Include any amounts subject to foreign resident withholding (excluding capital gains) in Australia that were distributed to the company from a partnership. You should also include the company's share of credit from foreign resident withholding (excluding capital gains). A credit can be claimed for the company's share of credit from foreign resident withholding (excluding capital gains) in the Calculation statement at label H2, Credit for tax withheld - foreign resident withholding (excluding capital gains).
Any adjustment for taxation purposes is shown at label B Other assessable income (item 7) or label X Other deductible expenses (item 7).
Click Label D to open Distributions from Partnerships (dip) to record details of these transactions and integrate the values with relevant labels in the return. Refer to Distributions from partnerships worksheet (dip).
Refer to the rules in the Guide to the taxation of financial arrangements (TOFA) rules on the ATO website.
Special rules apply where an entity is a partner in a partnership and joins a consolidated MEC group part-way through an income year. Refer to the Consolidation reference manual available on the ATO website.
Show at this label the total amount of gross distributions received from trusts including any share of franking credits attributable to dividends paid by an Australian company as advised by the trustee.
Refer to the rules in the Guide to the taxation of financial arrangements (TOFA) rules on the ATO website.
The amount at label E cannot be a loss.
Click Label E to open Distributions received from Trusts schedule (dit) to record details of these transactions and integrate the values with relevant labels in the return. Refer to Distributions received from trusts worksheet (dit).
If the company is in receipt of franked distributions directly or indirectly from a New Zealand franking company, refer to instructions in the Trans - Tasman Imputation: How to claim Australian franking credits attached to New Zealand dividends. This publication can be found on the ATO website.
All distributed income is included in the gross amount. An adjustment for taxation purposes must be shown for any part of the distribution that is derived from income that is not taxable income. To ensure that the amount is not included in taxable income, that part of the distribution is also shown at label Q Other income not included in assessable income (Item 7).
Special rules apply where an entity that is a beneficiary or object of a trust joins a consolidated or MEC group during an income year. Refer to the Consolidation reference manual available on the ATO website.
To the extent that family trust distribution (FTD) tax has been paid on income or capital of a trust to which the company is presently entitled or which has been distributed to the company, that income or capital is excluded from the assessable income of the company under section 271-105 of Schedule 2F to the ITAA 1936.
If the company's share of partnership income includes an amount received indirectly from a closely held trust on which trustee beneficiary non-disclosure tax (TBNT) has been paid, you do not need to include the amount in the company's assessable income.
Any losses or outgoings incurred in deriving an amount that is excluded from assessable income because FTDT or TBNT has been paid are not deductible. A tax offset cannot be claimed by the company for any franking credits attributable to the whole or part of a dividend that is excluded from assessable income under the provisions of section 271-105 of Schedule 2F or exempt income under sections 102UK or 102UM of the ITAA 1936.
Trust Type: Select from the list provided the code that best describes the type of trust. If this amount is from more than one type of trust, select the code that represents the trust providing the greatest amount of income.
If the type of trust making the distribution is unknown, contact the trustee of that trust.
Type of Trust
The codes for the type of trust are:
D - Deceased estate
F - Fixed trust - other than a fixed unit trust or a public unit trust at U, P or Q
H - Hybrid trust
I - Discretionary trust - where the main source of income of the trust is from investment activities
M - Cash management unit trust
P - Public unit trust (listed) - other than a cash management unit trust
Q - Public unit trust (unlisted) - other than a cash management unit trust
S - Discretionary trust - where the main source of income of the trust is from service or management activities
T - Discretionary trust - where the main source of income of the trust is from trading activities
U - Fixed unit trust - other than a public trust described at P or Q
P - Public unit trust (listed) - other than a cash management unit trust
Q - Public unit trust (unlisted) - other than a cash management unit trust.
For a full description of the six trust types, refer to Types of trusts.
Record Keeping
Keep a record of the following:
full name of the trust
TFN of the trust-if known
amount of income
deductible expenses relating to the amount of income.
Expenses incurred by the company as a beneficiary are shown at label S All other expenses (Item 6).
Non-deductible expenses are added back at label W Non-deductible expenses (Item 7).
Show at this label all payments the company has received from recipients of fringe benefits.
Employee contributions form part of the employer's, or associate's, assessable income in situations where employees make payments for fringe benefits they have received.
If you are the head company of a consolidated or MEC group, include all fringe benefit employee contributions received by you or by an entity that was a subsidiary member of the group when the contribution was received.
Click Label I to open the Generic Schedule / Worksheet.
CCH References
35-135 Employee contributions to benefits
Show at label J the amount (if any) of any unrealised gains made on the revaluation of assets to fair value that may arise as a result of the adoption of Australian Equivalents to the International Financial Reporting Standards.
Click Label J to open the Generic Schedule / Worksheet .
- Include any unrealised gain on the revaluation of a financial arrangement to fair value assessable under the TOFA rules at label K Income from financial arrangements at item 7 instead of at this item label J.
- Adjustments for tax purposes are made at Item 7 (Reconciliation to taxable income or loss).
- An unrealised gain that is not assessable income is recorded at label QOther income not included in assessable income at item 7
- Any net capital gain for taxation purposes is shown at Net capital gain item 7 label A.
- Any net capital loss is included with any unapplied capital losses carried forward to later income years and is shown at Net capital losses carried forward to later income years at label V Item 13.
This amount is included in total income and will be used in the calculation of base instalment income for PAYG instalment tax purposes.