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Non-Refundable carry forward tax offsets worksheet (ncf)

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The amount that makes up label D in the Calculation Statement of the company return is derived from items entered in the tax return as listed in the worksheet. Tax will integrate any known values to this worksheet. The worksheet may be opened directly at Label D in the calculation statement or from the Preparation > Schedule menu and selecting ncf.

Only those offsets that are non-refundable carry forward offsets integrate to this dialog. These offsets are limited to tax payable before refundable tax offsets and other credits.

In the Calculation Statement if the result of Subtotal T2 minus label D (integrated from this dialog) were to be negative, the amount at Subtotal T3 would be zero.

This worksheet will be printed as part of the Company Offsets from labels C and E.

Back to Calculation Statement

Refundable tax offsets worksheet (rto)

Exploration credits received by a Life Insurance Company only are now included in the rto.

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The amount that makes up label E in the Calculation Statement of the company return is derived from many items entered in the tax return.

This worksheet provides both for that integration and for the entering of other rebates and tax offsets calculated or received by the company.

Tax will integrate any known values to this worksheet. The worksheet may be opened directly at Label E in the Calculation statement or from the Preparation > Schedule menu and selecting rto or, if you sort your Schedules Index by the Code column, keying 'rto' and pressing [Enter].

This worksheet will be printed as part of the Company Offsets from labels C and D.

Options available:

To edit a capital gains transaction, highlight the required transaction in the index, then click Properties. The transaction details are available for editing.
To create a new worksheet, click New and record the details of the transaction.
To remove a transaction, highlight it and click Delete.
To close the index click Cancel or [Esc].

Back to Supporting schedules and worksheets

Capital gains worksheet data entry

The Capital Gains worksheet is where the details regarding the acquisition and disposal of assets subject to Capital Gains Tax are entered and the gain or loss calculated.

Category: Refers to the category of the asset (for example, Collectables, Personal Use Assets, Shares, Real Estate, Goodwill, Trust Distributions, etc.). You may select from a list of available categories.

From 1 July 2012, R for Real Estate; S or s for Shares; and U for Units in unit trusts are required to be split to differentiate those that specifically relate to Australian property, or Shares and Units in Unit Trusts that are listed on an Australian Securities Exchange from other types of property, shares and units in unit trusts. The dropdown list has therefore been expanded to include the new codes Q, N and V.:

The category code F Forestry MIS other than as an initial participant was removed.

R when the real estate is situated in Australia
Q for Other real estate
S or s for Shares in companies listed on an Australian Securities Exchange
N for Other shares
U for Units in unit trusts listed on an Australian Securities Exchange
V for Other units in unit trusts.

Item number: Refers to the number by which the asset will be referenced in the index. Item numbers 0 (zero) and 99 (ninety-nine) are reserved:

0 (zero) is reserved for Prior Year Capital Losses of the particular category of asset. When zero is entered as the Item number, the system will pre-fill the description as Prior Year Loss, close off all other data entry fields, and activate the PY Losses option so that the dissection details may be entered.
99 (ninety-nine) is reserved for Capital Losses Transferred In and is ONLY available for Company returns. When 99 is entered as the Item number, Tax will pre-fill the description as Capital Losses Transferred In.

Description: Is the ID of the particular asset. This affects how it is identified for both Indexing and Sharing. Enter text that describes the asset.

For commonly used descriptions in AE and Series 6 & 8, a Standard answer may be created. To select these during data entry click the Standard answers icon or [F7] and select from the Index of Standard answers; or, type a caret (^) followed by the code you have given the Standard answer. Refer to Standard answers

Important: Co-owned assets

Where assets are jointly owned and shared between 2 or more returns, in order that a previously shared asset of the same type and description is not overwritten in the co-owners' returns, the description of the asset needs to be different.

Example: If the taxpayer has disposed of more than one lot of shares of Telstra, say, and the description in the worksheet is the same for both transactions, the first transaction shared will be overwritten by the second transaction shared. In order to avoid this, you MUST differentiate the description. For example, the first transaction could be Parcel 1 or Lot 1 Telstra Shares, and the next transaction Parcel 2 or Lot 2 and so on.

Group of Asset: Refers solely to the category of the asset where the Capital Gain is distributed from a Partnership or Trust. Select from the list the category of asset gain distributed. These are Collectables, Personal Use Assets or Other – Unit/Split Trust Assets.

Active Asset: This checkbox must be selected to indicate that this is an active asset. When this checkbox is ticked the Small Business 50% Active Asset Exemption becomes available.

Small Business 50% Active Asset Reduction: The following conditions must be satisfied before the 50% active asset exemption can apply:

The net assets of the business must not exceed $5 million (grouping provisions may apply),
In the case of companies and trusts, there must have been at least one controlling individual immediately prior to the asset disposal.

By answering Yes to this question the capital gain will be discounted by 50% in all circumstances.

Small business 15-Year Exemption: Is editable for all Categories, except A - Listed Personal-use Assets and P - Non-listed Personal-use Assets. It is available to businesses that qualify for the small business CGT concessions.

Selecting this option provides a total exemption of a capital gain if a small business entity has continuously owned the GCT asset for at least 15 years, the relevant individual is 55 or over and retiring, or is permanently incapacitated and other conditions are satisfied.

Details of Asset

Purchased: Enter the date of acquisition and the amount paid on acquisition.

Disposed: Enter the date of disposal and the proceeds received on disposal.

FRWCG: Enter the amount of the Credit for non-resident withholding capital gains that has been deducted from the proceeds received by the non-resident for this transaction.

Foreign resident capital gains withholding (FRCGW)

Under the FRCGW rules contained in Tax and Superannuation Laws Amendment (2015 Measures No. 6) Bill 2015, foreign residents who dispose of certain Australian assets may have an amount withheld from the sale proceeds they receive. Similarly, Australian resident vendors who dispose of Australian real property with a market value of $2 million or more without providing the purchaser with an ATO issued clearance certificate, or dispose of an indirect Australian real property interest without providing the purchaser with a valid vendor declaration (resident), could have amounts withheld from their sale proceeds.

The new rules that apply to vendors disposing of certain taxable Australian property under contracts entered into from 1 July, 2016. A 10% non-final withholding will be applied to these transactions at settlement.

Australian resident vendors selling real property will need to obtain a clearance certificate from the ATO prior to settlement, to ensure they don’t incur the 10% non-final withholding.

The foreign resident vendor must lodge a tax return at the end of the financial year, declaring their Australian assessable income, including any capital gain from the disposal of the asset. The vendor may claim a credit for any withholding amount paid to the ATO in their tax return.

Australian resident vendors can avoid the 10% withholding by providing one of the following to the purchaser prior to settlement:

for Australian real property, a clearance certificate obtained from the ATO
for other asset types, a vendor declaration that they are not a foreign resident.

Foreign resident vendors may apply for a variation of the withholding rate or make a declaration that a membership interest is not an indirect Australian real property interest and therefore not subject to withholding.

Purchasers must pay the amount withheld at settlement to the Commissioner of Taxation.

Method

Frozen Index

CPI Index: Refers to the indexing factor, this is the amount (rounded to three decimal places) worked out by dividing the CPI quarter figure at the time the asset was disposed of by the CPI quarter figure at the time the cost was incurred. This factor will be applied to the cost base to arrive at the indexed cost base.

Gain/Loss: Refers to the amount of Capital Gain or Capital Loss calculated using the Frozen Index Method.

Discount

This indicates the discounted capital gain after any small business concessions are applied.

If a CGT event happened to a CGT asset you acquired before 11.45am (by legal time in the ACT) on 21 September 1999 and owned for at least 12 months, you can use either the indexation method or the discount method to calculate your capital gain.

If you use the indexation method, some of the cost base expenditure you incurred up to this time may be indexed to account for inflation up to the September 1999 quarter. Only expenditure incurred before this time may be indexed because changes to the law mean indexation was frozen at that date

The discount capital gain will be zero if:

The Nominal Pre-discount Gain/Loss is less than or equal to zero, and
The entity's discount rate is zero because it is a company or a non-complying superannuation fund.

A gain will be calculated in this field if:

The asset was purchased before and disposed of after 21 September 1999; or
The asset was purchased and disposed of on or after 21 September 1999.

Select method: Allows the capital gains calculation method selected by Tax to be overridden. Where an asset is purchased before 21 September 1999 and disposed of after 21 September 1999 and held for 12 months or more, Tax will calculate the capital gain/loss using both methods. Tax will then display the name of the method that produces the lowest capital gain.

Where Tax selects the Frozen index method as the lowest capital gain, FI is displayed in the field, but this method may be overridden by selecting DS (Discount override).

Similarly, where Tax Discount method is selected as the lowest capital gain, DS is displayed in the field, however this method may be overridden by selecting FI.

The field will not be editable if:

The asset was purchased and disposed of before 21 September 1999 - FI is the default and cannot be changed; or
The asset was purchased and disposed of on or after 21 September 1999 - DS is the default and cannot be changed.

Capital Gain/Loss: Displays the calculated capital gain or loss.

Where the frozen index method is system-calculated, or overridden by the user, the amount in the Frozen Index Method Gain/Loss is shown as the Capital Gain/Loss.

Where the discount method is system calculated or overridden by the user, the Discount Capital Gain amount is shown where it is greater than zero. It will be zero where there is a capital loss or the entity type does not quality for the discount (because it is a company or a non-complying superannuation fund).

Residency Status at 8/5/2012

This button accesses the dialog where details required for Non-residents may be entered. Refer to Non-Residents No CGT discount after 8 May 2012.

Index of Exemptions

Use these buttons to detail each exemption for the current item by creating entries in the appropriate Index of Exemptions. Please note that each asset may only have one exemption code transmitted electronically to the ATO, therefore where you have multiple entries for any one CGT event and have selected different codes, Tax will use the first code entered as the main reason for the Exemption (the one code also applies to the reason for the Rollover).

General Exemptions

This refers to specific exemptions under the CGT provisions that are in addition to the general exclusion from capital gains tax of assets purchased before 20 September, 1985. From 1 July 2012, you will be required to select a code relative to the exemption. For further details refer to the Guide to Capital Gains Tax available on the ATO website; also refer to General Exemption Details.

Roll-over or Retirement Exemptions

This refers to roll-over and retirement exemptions available to businesses that qualify for the small business CGT concessions. From 1 July 2012, you will be required to select a code relative to the exemption. For further details refer to the Guide to Capital Gains Tax available on the ATO website.

Any Roll-over or Retirement exemption amount(s) are applied after the application of any Discount and/or 50% Active Asset reduction; also refer to Rollover/Retirement Exemption Details.

Shared Ownership

Shared ownership refers to the facility to share the Capital Gain or Capital Loss with another taxpayer on a percentage basis. Click [Alt+S] to gain access to the Shared Ownership Index. All returns contained in the ledger will be displayed. Refer to Shared Ownership Distribution Details.

Capital Additions

Click [Alt+A] to gain access to the Additions Index. Refer to Capital Additions .

Allowed as Deductions

Click [Alt+W] to gain access to the Allowed as Deductions Index. Refer to Allowed as Deductions.

Deductions Recouped

Click [Alt+D] to gain access to the Deductions Recouped Index. Refer to Deductions Recouped.

Section 104-70 Income

Click [Alt+7] to gain access to the Section 104-70 index. Additional detailed Help is available for this option. Refer to Section 104-70 Income.

Prior Year Capital Losses

Prior year capital losses must be entered in accordance with the category of the loss. To record prior year capital losses therefore, firstly select the asset category; then enter zero (0) in the Item number field. The heading PRIOR YEAR LOSS will default to the description field. All non-relevant fields will be closed and the cursor will jump to the Amount field for you to record the amount of the prior year capital loss.

Application of Capital Losses

The application of losses is automated by the tax program and occurs on integration from the Capital Gains Index to the label in the main income tax return.

Capital Losses are applied:

Current year capital losses are firstly applied to capital gains from assets of the same category as the loss, then all 'other capital losses' (other than Collectables) are applied to the remaining capital gain (other than Collectables).
Prior year losses are applied in the same fashion as current year capital losses (other than Collectables)
Personal Use Assets (other than collectables) may not incur a loss.

Back to Capital gains worksheet (g)

Non-Residents No CGT discount after 8 May 2012

Although the Government removed the 50% discount for foreign resident individuals on discount capital gains accrued after 8 May 2012, the full CGT discount of 50% is available for capital gains accrued up until that time.

The change to the law requires an apportionment calculation, as well as a decision about which method to use where part of the gain accrued up to the cut-off date of 8th May 2012. This change was enacted by Tax Laws Amendment (2013 Measures No.2) Act 2013 which received royal assent on 29 June 2013 for CGT events occurring after 8th May 2012.

The Capital gains worksheet (g) will calculate the CGT discount percentage (expressed as a %), and where the taxpayer has no capital losses to be offset, the CGT discount amount and the capital gain amount (after discount) for CGT events occurring from 1 July 2012.

The special rules impact Individuals including beneficiaries of trusts, and partners in partnerships, who:

Are foreign and temporary residents after the 8 May 2012, or
Are Australian residents with a period of foreign residency after 8 May 2012, and
Have a discount capital gain from a CGT event that occurred after 8 May 2012.

The calculations are quite complex and the following information outlines the conditions that are considered in the calculation of the CGT discount percentage and how the discount is apportioned.

Tax requires the following information to be entered in the Capital gains worksheet (g).

Discount testing period

The discount testing period is the number of days from the date the asset was acquired, to the date it was disposed of and is auto-calculated from the details you enter for the asset.

What are the beginning and end dates

If you have a discount capital gain as a beneficiary of a fixed trust, use the date you became a beneficiary of the trust as the date the asset was acquired. The end date will be the date you received the gain.
If you have a discount capital gain as a beneficiary for a trust that is not fixed
If the gain was received because a CGT event occurred to an asset acquired by the trustee of the trust, use the date the CGT asset was acquired. This includes gains received directly or indirectly through any interposed trusts that are not fixed. The end date will be the date you received the gain.
If the gain was received directly or indirectly through one or more interposed trusts and is linked to a capital gain made by a fixed trust, use the most recent date the trust directly linked to the trust that made the capital gain, became the beneficiary of that trust. The end date will be the date you received the gain.

Qualifying the acquisition date

Tax will discern whether the asset was acquired on or before or after 8 May 2012 from the acquisition date entered.

Periods of residency

If the Asset was purchased after 8 May 2012, Tax needs to know:
the residency status of the taxpayer on 8 May 2012
the number of days in the period from 8 May 2012 (within the testing period) that the individual spent as an Australian resident.

The preparer will enter this in the relevant field in the Status at 8 May 2012 dialog.

If the asset was purchased on or before 8 May 2012, Tax needs to know:
If the residency status of the taxpayer on 8 May 2012 is Australian

The number of days in the period from 8 May 2012 (within the testing period) of foreign or temporary residency.

If the residency status of the taxpayer on 8 May 2012 is Foreign or temporary

The number of days in the period from 8 May 2012 (within the testing period) of Australian residency.

Manually calculating the CGT discount percentage

Alternatively, individuals may choose to calculate their CGT discount percentage using the apportioning method or the Market Value Method.

Entering the CGT Status details

To be able to collect the details described above, a new button 'Residency status at 8/5/2012…' is provided on the General tab:

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When you open the Residency Status dialog, Tax will have calculated the number of days from 8 May 2012 to the end date (the disposal date) and that figure will be shown in one or other of the Number of days field in accordance with the selection you make of Australian or Foreign or temporary resident at 8 May 2012.

The default is Foreign or temporary resident at 8 May 2012 and if this is not correct, you should tick the Australian radio button.

What do you have to calculate and enter?

The only things that you are responsible for are:

Selecting the relevant 8 May 2012 residency status if it is not Foreign or temporary
Based on the residency status calculating the number of days after 8 May 2012 in all periods of residency and entering that number in the relevant field
If residency status is Foreign or temporary choose whether you want to use the Apportioning method or the Market value method, and
If you choose the Market Value Method then you are responsible for entering both the Market value of the asset on 8 May 2012 and the Unindexed cost base on 8 May 2012.

Whatever the taxpayer's residency on 8 May 2012, you will be required to calculate and enter the number of days' residency whether that be Australian residency or Foreign or temporary residency.

Refer to Market value method .

How Tax manages the available resident days

If the total of non-resident and resident days doesn't add up to the total days from
9/5/12 to date of disposal, then the program will recalculate as follows:

If the purchase date is after 8 May, then the Australian residency days = (Total days less Non-Residency days). You will need to calculate and enter the number of days from 8 May 2012 to the disposal date that the individual was an Australian resident (the program presumes you have done this).
If purchase date is on or before 8 May then:

If the individual is an Australian resident on 8 May 2012: then the Non-residency days = (Total days less Residency Days). You will need to calculate and enter the number of days the individual was a non-resident (the program presumes you have done this).
If the individual is a Non-Resident on 8 May 2012: then the Australian Residency days = (Total Days less Non-Residency Days). You will need to calculate and enter the number of days the individual was an Australian resident (the program presumes you have done this).

A manual worksheet the 'CGT Discount Worksheet' is available on the ATO website.

Market value method

If the taxpayer was not a resident on 8th May and chooses to use the market value method, the calculator will need to work out:

The excess - the amount by which the CGT asset's market value on 8 May 2012 exceeds the amount that was its unindexed cost base at the end of that day
The shortfall - means the amount that the excess falls short of the amount of the discount capital gain.

Where the taxpayer is not a resident on 8th May you will be prompted to supply the asset's market value and unindexed cost base on 8th May so Tax can calculate the discount % using the market value method.

Capital Gains/losses

The Capital Gains Worksheet will calculate complex capital gains/losses and the results integrate to the return. Calculations that amount to $10,000 or more will integrate to the Capital Gains Schedule (BW).

Each Capital Gains worksheet identifies the following categories of capital gain/loss:

unindexed and non-discounted capital gains (for assets held less than 12 months) and Frozen Index capital gains (described as Other gains)
discount capital gains (that is, all gains with the discount percentage applied)
Small business Capital Gains concessions, including the 50% Active Asset reduction, 15-Year exemption, and the Roll-over and Retirement exemptions.
current year capital losses
prior year capital losses

Each Capital Gains worksheet is accessed from a Capital Gains Index of worksheets related to the same return.

From each worksheet, separate indexes of items in each category may be maintained. For more information, refer to Capital gains worksheet data entry.

Applying Losses

For Category A assets (Collectables) and Category P assets (personal use assets), disposals are segregated in their individual categories. Collectable losses can only be applied against collectable gains and Personal use assets capital losses are lost.

Previously, current and prior capital losses of any category (for example, shares) were first applied to current year gains of that category. Any residual capital losses would then be applied to other gains.

Under the new provisions, before losses are applied, any asset must be 'grossed up' to its nominal value (that is, the value of the gain prior to applying any Discount, 50% Active Asset Exemption, Retirement, or Roll-over exemption that may be available). The new provisions then allow the taxpayer to choose how to apply the various classes of capital losses to capital gains.

Tax applies losses in the standard order:

Current capital losses before prior year capital losses;
Capital losses first to any unindexed or frozen index gains; and
Any remaining capital losses to the discount capital gain (prior to discounting).

This standard order of applying losses may not be the optimal in each case. Particularly when an asset has any Roll-over or Retirement exemption, this will complicate the optimal application of losses.

Capital Gains assets with category type Z

Capital Gains amounts received as the result of a Trust distribution and entered in the Distributions from trusts worksheet (dit) create an entry in the Capital Gains worksheet (g) attached to the income tax return. The category of the asset created by this method has category type Z.

If there is no Worksheet g attached to the return when the distributed amounts integrate to the return, the worksheet is created with the required entries.

From the Capital Gains worksheet index the details of an asset with category Z may only be viewed.

To maintain the details of these assets open the applicable income tax return and from the applicable item press [Enter]; or Preparation > Schedule > Distributions from Partnerships worksheet (dip); or Preparation > Schedule > Distributions received from Trusts worksheet (dit).

Back to Capital gains worksheet (g)

Capital Gains Discount Rates

The capital gains discount rates for assets held for more than 12 months and sold on or after 21 September 1999 are listed in the table below. The discount is not available for assets held for less than 12 months.

The discount is not available to non-residents for assets purchased on or after 8 May 2012. A reduced discount is available for non-residents with a period of Australian Residency during the period.

Entity	Discount Rate
Individual	50%
Partnership	N/A
Trust not assessed under Sec 99	50%
Trusts assessed under Sec99	No discount
Company	No discount
Superannuation Fund (complying)	33.3%
Superannuation Fund (non-complying)	No discount
In all cases where Asset held less than 12 months	No discount

Back to Capital gains worksheet (g)

General Exemption Details

In addition to the general exclusion from capital gains tax of assets purchased before 20 September, 1985, there are specific exemptions under the CGT provisions. The most significant of these is the exemption of a taxpayer's principal residence. Partial exemptions apply where the property is used for income-producing purposes for part of its life and as the taxpayer's residence or holiday residence for part of the time.

Other exemptions include gambling wins, certain awards, disposals under cultural bequests, etc.

Details: This refers to a description of the reason for seeking the exemption. Standard answers can be created in AE and Series 6 & 8 for details of all kinds. Click [F7] to select from the index of Standard answers, otherwise type the details.

Exempt From: This refers to the start date of the period of exemption. This date must be within the life of the asset; that is between the date of acquisition and the date of disposal.

Exempt To: This refers to the end date of the period of exemption. This date must be a date later than the From date and any date up to the date of disposal. If a date is not entered, Tax will default the current year end date.

Exempt Proportion: This field is not available for entry if dates have been entered. To use a calculated proportion rather than dates, enter the known proportion at this field.

Code: Select from the list available the code for the type of exemption.

The code you select must be appropriate for the type of tax return being prepared. For example, if when preparing a Company return you select Code I Main Residence exemption, the error message ‘Code not valid for this form type’ will be generated.

OK: When details have been entered and you click OK, the net capital gain for the asset will be reduced by EITHER:

the number of days in the exemption period as a proportion of the total number of days from the date of acquisition to date of disposal multiplied by capital gain, OR
the capital gain calculated multiplied by the exempt proportion.

The reduced amount is the amount which will be included at the Capital Gains label in the appropriate return.

Back to Capital gains worksheet (g)

Rollover / Retirement

Small Business Roll-over (Subdivision 152-E of the ITAA 1997)

The small business roll-over allows a small business entity to defer the making of a capital gain from a CGT event happening in relation to a small business asset if it acquires replacement assets and certain conditions are satisfied.

To view the details of a CGT event, select Properties.

To enter the details of a new CGT event, select New.

For a description of these details refer to Rollover/Retirement Exemption Details.

Click this link to open the Guide to capital gains tax 2017 (NAT 3423).

Back to Capital gains worksheet (g)

Rollover/Retirement Exemption Details

Type: Select from the list either O for Rollover or R for Retirement.

Details: This refers to a description of the reason for seeking to roll over all or some of the capital gain calculated. Standard answers can be created in AE and Series 6 & 8 for details of all kinds. Click [F7] to select from the index of Standard answers, otherwise type the details.

Amount: This refers to the amount of the capital gain calculated which is to be rolled over.

The amount entered will be excluded from any total to be included as assessable income in the taxpayer's income tax return.

Code: Select from the list the code applicable to the rollover or exemption

Click [Alt+O] to save the entry.

Total of individual years do not match total losses brought forward

These instructions only apply if you get the message 'Total of individual years do not match total losses brought forward'.

Cancel the Prior Year Capital Losses Dissection.
Clear the amount shown as Purchased amount, click [Tab].
Click OK to save and close.
From the Capital Gains worksheet index click Properties again.
Click PY Losses.
Clear out any values that are remaining on the dissection list remembering to click [Tab]. Click OK.
Click OK again to save and close the Item Properties.
From the Capital Gains worksheet index click Properties again.
Enter the required values as described in steps 1 - 6 above.

Index

The index list displays sufficient information about each capital expense to identify it, based on the data entered in the worksheet.

How to open the Capital Works Deductions Index:

Click Preparation > Schedule > Capital Works Expenses. or
click [Alt+S] at any of the items or labels to which this schedule integrates:

C Form: Item 7, Label I
F and MS Forms: Deductions Item 11 Label D
P and T Forms: Item 5
Schedule B (Business Income)
Schedule C (Primary Production Income) and
Rental Schedules (B and BR)

The Index Column headings are:

Item

This refers to the identity number for each building or capital improvement to it. The field will allow any number between 1 and 99999.

Integration

Provides the code for the schedule or worksheet to which the write-off value will integrate. Refer to Capital works deduction integration.

Amount

Is the amount for the current year write-off calculated for this particular item? This amount is recalculated automatically each year during the year-end roll over procedure when Closing balances are moved to Opening balances.

Description

Allows up to 36 characters for a description of the building or capital improvement.

Button options available:

Properties: If there are existing entries in the Index, clicking on Properties opens the worksheet for that item. Refer to Capital Works Expense Item Worksheet.

New: Selecting New will open a blank worksheet for recording the details of the new building or structural improvement expense.

Delete: To remove an entry from the Index, move the cursor to the entry or click on it and select Delete.

Back to Supporting schedules and worksheets

Capital Works Expense Item Worksheet

A tax deduction is allowed under Div 43 for the capital cost of constructing capital works to be written-off.

Such Capital works are:

Buildings
Structural improvements
Environment protection earthworks
Extensions and alterations or improvements to these.

Deductions for capital works include deductions for eligible capital work on extensions, alterations or improvements to a building or structural improvement.

Structural improvements include sealed roads, driveways and car parks, bridges, pipelines, fences, concrete or rock dams and artificial sport fields.

How to Complete the Capital Works worksheet

Asset number: The number you choose to assign to this asset and the number by which the asset and its details will be recognised and stored by Tax. This can be any number between 1 and 99999.

Description:

This field allows for a description up to 36 characters for the name of the building or structural improvement expense.

Integrate:

Integration is available from this worksheet to Rental Schedules (ren and rep), the Non-primary production Business income schedules (b) and Primary production income schedules (c). Click [F10] to choose the relevant schedule to which the building deduction write-off for the year should be integrated. Refer to Capital works deduction integration.

Construction Commenced: Enter the date of construction of the building or structural improvement commenced. The permitted date range is detailed on screen.

Write-off Start Date: Enter the date that write-off is to commence. This date must be in the current income year as detailed on screen.

Construction Cost: Enter the cost of construction.

Opening written-down value: This amount must not be more than the construction cost.

Write-off rate%: Select between the two allowed rates (2.500 or 4.000%).

Asset disposal date: Enter the date of disposal of the building. The allowable date range is shown on screen.

Closing written-down value: Tax calculates this amount from the opening written down value and the write-off rate% selected.

Amount for write-off: Tax calculates this amount using (Construction cost * the Write-off %)

Accumulated write-off: The Accumulated write-off collects the capital works deductions claimed over the life of the property. This is to assist with recouping capital works deductions on the sale of a property.

Return total: Tax sums the total amount of building deductions for all depreciated assets for this return. The Return Total is the same on all Capital Works Expenses worksheets attached to a return.

Notes on Capital Works Deductions

Non-residential: Where construction commenced after 26 February, 1992, the costs were written off at the rate of 2.5% p.a., except where the building was used for 'eligible industrial activities' (MTG 20-490), in which case the rate of write-off is 4% (this higher rate does not apply to structural improvements).
Income producing structural improvements from 27/02/92 are 2.5%
The short-term traveller accommodation deduction is available under Div 43
Where the construction is pursuant to a 'qualifying previous commitment' the rate is 4%.

For the current ATO rate information based on ‘date construction commenced’ click this link to the ATO website.

Back to Capital works deductions worksheet (sbw)

Capital works deduction integration

This Integration Selection screen is offered to allow you to nominate the specific schedule of the type selected to which integration will occur.

Schedule number: This is relevant because the schedule type chosen may have multiples. For example, if there are three rental properties associated with the taxpayer's return then three rental schedules will need to be attached to the return. If these capital works expenses were incurred on the property described in the second Rental schedule, enter 2 for the Schedule number.

A warning is offered if there is no schedule corresponding to the schedule number you enter. If you continue the schedule will be created.

Back to Capital works deductions worksheet (sbw)

Deductions relating to Australian investment income (dai)

The dai worksheet is tailored to meet the needs of the type of return to which it is attached. Refer to:

Partnership return Deductions relating to Australian investment income (label P and R)
Trust return Deductions relating to Australian investment income (labels P and R)

Back to Supporting schedules and worksheets

Deductions relating to Australian investment income (label P and R)

The dai worksheet is mandatory at item 16. This item is closed to data entry.

Enter deductions relating to Dividends received whether directly from a Company, listed or unlisted, or by Distribution from a Managed investment trust into the worksheet at this item and not at item 18.

Amounts entered in this worksheet, together with amounts that have been integrated from the Motor vehicle worksheet (mve), the Depreciation worksheet (d), and the deductions field of the Interest income worksheet (int) will be totalled and returned at label P in the main return.

If the Partnership was paid a dividend by a LIC directly and the dividend included a LIC capital gain amount, the Partnership can claim a deduction of 50% of the LIC capital gain amount. The listed investment company's dividend advice statement shows the LIC capital gain amount:

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If all the expenses do not relate to income from investments, then change the answer to No and enter the unrelated amount in the field provided. The amount will be pre-filled to item 50, label G from where it will be transferred to the Distribution Statement to be distributed to the partners in their respective percentage interest in the Partnership. The Partner will need this amount when completing their personal income tax returns.

Deleting the dai worksheet from the return

To delete the worksheet entirely you should open the dai and check for amounts that have been integrated from the Motor vehicle worksheet (mve), the Depreciation worksheet (d), and the Interest income worksheet (int). If these are present, then you need to open those worksheets and set the relevant amounts to zero or delete the worksheets entirely.

When the integrated values in the dai worksheet are cleared, you can manually clear the content of the dai or delete it entirely.

The dai worksheet is mandatory at item 16. The field in the return is closed to data entry.

Deductions relating to Australian investment income (labels P and R)

Amounts entered in this worksheet, together with amounts that have been integrated from the Motor vehicle worksheet (mve), the Depreciation worksheet (d), and the deductions field of the Interest income worksheet (int) will be totalled and returned at label P and/or label R in the main return in accordance with the dissection in the new Franked Distribution field below.

If the trust was paid a dividend by a LIC directly and the dividend included a LIC capital gain amount, the trust can claim a deduction of 50% of the LIC capital gain amount. The listed investment company's dividend advice statement shows the LIC capital gain amount:

If the LIC dividend is franked (either fully or partially) then include any deduction relating to a LIC capital gain in the Franked distributions field second from the bottom of the worksheet so that it is included in any amount that is to be integrated to label R.
If the LIC dividend is unfranked, then it will automatically be included in the amount that is integrated to label P.

The listed investment company's dividend advice statement shows the LIC capital gain.

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If you change the answer to No, then you must enter the amount of the Total Australian investment income deductions in the field provided as this amount will affect the amount of Franked Distributions available for distribution to presently entitled beneficiaries at item 54.

Deferred losses from Partnership Activities Label F

Any partnership non-commercial losses that must be deferred are to be dissected into those relating to Financial investment activities and those related to rental properties.

This dissection box opens from the individual return at Item 16 Label F-Your share of deferred losses from partnership activities .

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Click this link to open the Non-commercial business losses home page on the ATO website.

This part only applies if the taxpayer carried on a business in partnership with others.

If the taxpayer made a net loss from one or more business activities carried on in partnership with others in the current income year, the following questions will need to be considered.

Does the net loss from that business activity come within the Exceptions described? If the answer is NO, continue.
Does the net loss from that business activity satisfy one of the 4 tests described? If the answer is NO, continue.
Has the Australian Taxation Office advised the taxpayer in writing that the Commissioner will exercise his discretion to allow the taxpayer to claim a net loss from that business activity? If the answer is NO, continue.

Step 1: Work out the net loss to be deferred from the business activity that was carried on in partnership with others. If there is a net loss from only one business activity, go to step three.

Step 2: If there is a net loss from more than one business activity that was carried on in partnership with others, add up all the net losses to be deferred.

Step 3: Enter the total of your net losses to be deferred from business activities you carried on in partnership with others.

The sum of the total amounts entered for primary and non-primary production is calculated.

Step 4: Check that you have included the amount of your deferred non-commercial business losses in working out your Partnership and Trust distribution (Item 13) in the main return; otherwise you will have overstated your taxable income.

Step 5: Keep records of the net losses deferred for all your business activities.

Step 6: Make sure that you have completed Number of business activities (Item P3) and Business loss activity details (Item P9) in the business and professional items schedule.

IMPORTANT: The business and professional items, Business loss activity details (Item P9) MUST record the 3 highest loss-making activities (if more than three loss activities apply), whether or not the losses from these activities are being deferred.

Back to Deferred Non-commercial Business Losses worksheet

Deferred losses from Sole Trader Activities Label G

Any Sole Trader business non-commercial losses that must be deferred are to be dissected into those relating to Financial investment activities and those related to rental properties.

This dissection box opens from the individual return at Item 16 Label G-Deferred Non-commercial business losses for sole traders .

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Click this link to open the Non-commercial business losses home page on the ATO web site.

These questions do not appear on the worksheet but are set out here to assist you in completing this item, either directly or by using the worksheet.

Did you make a net loss from a business activity as a sole trader in the current income year? If YES, you made a net loss from more than one business activity as a sole trader: you must answer the questions that follow.
Does your net loss from your business activity come within the Exception described? If NO, continue.
Does your business activity satisfy one of the 4 tests listed described? If NO, continue.
Has the Australian Taxation Office advised you in writing that the Commissioner will exercise his discretion to allow you to claim a net loss in relation to that business activity for the year? If NO, continue.

You have answered YES to question 1 and NO to each of questions 2, 3 and 4. For each of your business activities follow the steps below to complete this item:

Step 1: Work out the net loss to be deferred from your business activity that you carried on as a sole trader. If you have a loss from only one business activity, go to step 3.

Step 2: If you have a net loss from more than one business activity that you carried on as a sole trader, add up all the net losses to be deferred.

Step 3: Enter the total of your net losses to be deferred from business activities as a sole trader (Item 16 Label G) on your tax return or open the Deferred non-commercial business losses worksheet for sole trader.

Step 4: Check that you have included the amount of your deferred non-commercial business losses in working out your Personal Service income (Item 14) and Net income/loss from business (Item 15) on your tax return; otherwise you will have overstated your taxable income.

Step 5: Keep records of the net losses deferred for all your business activities.

Step 6: Make sure that you have completed Number of business activities (Item P3) and Business loss activity details (Item P9) in the business and professional items schedule.

Business Loss Activity Details (Item P9)

IMPORTANT: The business and professional items, Business loss activity details (Item P9) MUST record the 3 highest loss-making activities (if more than three loss activities apply), whether or not the losses from these activities are being deferred.

Back to Deferred Non-commercial Business Losses worksheet

Dependency Tax Offsets

The Dependency Tax Offsets menu is opened from the Individual return at item T4, or T6 or by selecting the worksheet from Preparation > Schedule > shz Invalid or carer, Zone offsets.

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The menu provides buttons to access separate dialogs for:

Zone or Overseas Forces Offset
Invalid spouse or carer

With effect from 1 July 2015, if your normal residence is in a Zone (a Remote area being a Special or Ordinary Zone and you are eligible to claim a Zone or overseas forces offset at T4, the claim you make at T6 for your Invalid spouse or invalid carer offsets will form part of the base amount for Zone or overseas forces offset purposes.

Back to Tax Offset items in Form EI

Zone or Overseas Forces Offset

Zone offset

To qualify for a zone offset the taxpayer’s normal residence must be in a zone (not necessarily continuously) for 183 days or more during:

2016-17, or
the period 1 July 2016 to 30 June 2017 (including at least one day in 2016-2017) and a zone offset was not claimed in the 2016 tax return.

The zone tax offset is made up of three amounts:

the fixed amount for the relevant zone, plus
a percentage of a base amount, plus
the invalid spouse or carer, invalid relatives, parents/parents-in-law claimed at item T6 invalid and carer.

Overseas forces tax offset

To qualify for an overseas forces tax offset the taxpayer must have served in a specified overseas locality as a member of the Australian Defence Force or a United Nations armed force in the current income year AND the income relating to that service was not specifically exempt from tax. Periods of service for which the income was 'exempt foreign employment income' are excluded in working out eligibility for the tax offset.

If the overseas service was less than 183 days, you may be able to claim part of the tax offset.

To claim the full overseas forces tax offset:

The taxpayer must have served in the overseas locality for 183 days or more in the current income year, or
The total number of days served in the overseas locality, when added to the number of days spent in one or more zones, must be 183 days or more.

Circumstances tab

This tab provides for the selection of the relevant zone or zones and the collection of the amounts that go to make up the Total Zone or overseas forces offset claimed in the return.

All amounts other than the number of days spent in a zone or zones or overseas localities and the Remote area allowance are transferred from the Base amount offsets tab or calculated in this tab.

Enter the number of days the taxpayer resided or worked in one or more Australian Zones or an overseas locality.

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Base amount: These are the Notional offset claimed in the worksheets contained in the Base amount offsets tab (Sole Parent and Dependent child/student). To this amount is added the offset claimed at T6 Invalid and carer and displayed in the Notional Offset box. If the taxpayer resided in a Special zone, then 50% of the base amount is added to offset for the special zones and 20% for the ordinary zones.

Notional Offset: The amount in this field is the sum of the Invalid and care offset you have claimed at T6 including:

Your invalid spouse or carer
Your or your spouse's invalid carer parent
Your or your spouse's invalid, child, brother or sister (an invalid relative)

If you had sole care of a dependent child or student and you have not claimed any offset at T6, then you may be entitled to a notional Sole Parent offset as part of your base amount.

Remote Area Allowance: Enter any amount of remote area allowance received from Centrelink or the Department of Veterans' Affairs or the equivalent amount that was included in an exceptional circumstances relief payment. Such an amount will reduce the Total offset calculated.

Offsets Calculated: This is the summary section of the worksheet and is not open to edit.

Base amounts tab

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Base amounts are passed from offset claimed at T6 as well as any that have arisen as notional offsets from the Base amounts tab. Once the number of days is entered in the relevant Zone under the Circumstances tab, any offset available will be calculated.

Before attempting to calculate Notional non-return offsets, ensure that where the taxpayer has a spouse the Spouse Details item has been fully completed.

Buttons for these worksheets are available from this dialog:

Notional Sole Parent
Notional Dependant offset

Back to Dependency Tax Offsets

Sole Parent Special circumstances

If you had a spouse (married or de facto) at any time during 2016-17, you are entitled to a notional sole parent tax offset only in special circumstances.

Generally, for special circumstances to exist, you must have been financially responsible for and have had sole care of the dependent child or student, without the support a spouse normally provides.

Examples of situations where special circumstances may arise:

You were married or in a de facto relationship at any time during 2016-17 but during the year you separated from or were deserted by your spouse, and for the period that you will claim the sole parent tax offset you were not in a de facto relationship.
Your spouse was in prison for a sentence of at least 12 months.
Your spouse was medically certified as being permanently mentally incapable of taking part in caring for your child or student.

If you are unsure whether special circumstances applied, then phone 13 28 61

Back to Offsets Calculated: This is the summary section of the worksheet and is not open to edit.

Notional Dependant offset

Dependent children are those under 21 years of age on 30 June 2017; Dependent students are those under 25 years on 30 June 2017 in full-time education at a school, college or university.

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This is a transactional dialog used to record more than one entry for details of dependent children/students. These transactions are for the purposes of calculating any notional offsets that are to be included in the Base Amount when calculating the Zone and Overseas Forces rebate.

When all details have been completed, the entry will be moved out of Details and a fresh set of fields will be provided for the next child or student.

Child/Student: In order that the correct notional amount ($376 for each Student under 25 and $376 for the first child under 21 and $282 for each subsequent child under 21). From the list select either Child (under 21) or Student (under 25).

Date of Birth: Enter the dependant's date of birth. An error message will be generated if the child's or student's age is outside of the legislated age.

Name: Enter the dependant's name. This is for record keeping purposes only.

Adjusted Taxable Income: Enter the dependant's Adjusted Taxable Income. Amounts above $1786 will be pro-rated against the maximum notional offset available.

Number of Days: Enter the number of days the dependant was maintained by the taxpayer.

Proportion: Enter the percentage of the taxpayer's contribution to the maintenance of the dependant.

Offset available: The amount calculated for each entry is displayed in this field.

When all the children and students details have been entered, select the Close button to exit.

Back to Medicare Levy Worksheet or Zone or Overseas Forces Offset

Annuity and Super Income Stream Offset (pen)

The Australian Annuities and Super Income Streams dialog is used to collect the information required to calculate the offset the taxpayer is entitled to, if any.

This is a transactional dialog used to record more than one entry for details of annuities and superannuation income streams from more than one fund that the taxpayer may receive. If more than one set of payment details is entered, the sum of the offset calculated for each will be integrated to item T2 in the tax return and included in the Tax Estimate.

Payer’s name: This is for record keeping purposes only.

The checkboxes on the right-hand side of the dialog are to collect information required and that is not contained on the Payment advice received by the taxpayer.

Taxpayer in receipt of a disability pension: If the payment is a disability income stream and the taxpayer has not yet reached 55 years (the current preservation age), checking this box will provide the taxpayer with the higher offset. Select this checkbox if this condition is true.

Death Benefits: Different rules apply to Death benefit income streams and if the payment is a death benefit, this box should be ticked.

Dependant of deceased: If the payment is a death benefit, this field will be open to edit and must be ticked if the condition is true.

Deceased 60 or over: A different rate of tax is applied for Death benefit payments where the deceased was 60 or over at the time of death. For the correct calculation of the offset, if this condition exists for a death benefits payment, you must tick this box.

Taxpayer 60 or over: This information is also required for the correct calculation of the offset and Tax will default a tick to this box from the date of birth entered on the Front Cover of the return.

Taxpayer 55 to 59: This information is also required for the correct calculation of the offset and Tax will default a tick to this box from the date of birth entered on the Front Cover of the return.

Date of Payment: This date is required to establish whether the taxpayer received the payment before the preservation age of 55 and not after the age of 60 was reached. The date is entered in the format dd/mm/ccyy.

Amount of payment eligible for offset: Enter the amount eligible for this rebate. Exclude from this amount the amount received by the taxpayer prior to reaching the age of 55.

Back to Tax Offsets Worksheets

Super Co-contributions What-if

If you made an eligible personal super contribution to a complying super fund or retirement savings account for which you are not claiming a deduction in your tax return, and:

You were under 71 years old on 30 June 2017, and
Your taxable income for 2016-17 was less than $51,021*.

You could be entitled to a Government co-contribution of 50% of a maximum amount of contributions of $500.

Click this link to the ATO for Key superannuation rates and thresholds.

If you do meet the age and low income conditions, you must complete item A3 in the individual return.

This worksheet is a What-if calculation and the co-contribution calculated is not included in the estimate. It is provided in order that you can advise your client of the amount of co-contribution he or she might expect the Government to deposit into their superannuation fund.

For taxpayers with a taxable income of $36,021 or less in the current year the Government will match their personal super contributions. For every dollar the taxpayer contributes the Government will put into their fund 50 cents - up to a maximum Super Co-contribution of $500 paid in the year.

To receive a co-contribution the total income (that is assessable income plus reportable fringe benefits, reportable superannuation contributions and adjustments made for Rental losses or Investment losses (including rental losses) MUST be less than the higher income threshold, $51,021, AND the taxpayer must earn 10% or more of total income from:

Employment,
Carrying on a business, or
A combination of both.

From 1 July 2017, the 10% no longer applies.

Eligibility

Click this link to the ATO for information on Super co-contribution eligibility.

Although the taxpayer does not need to apply for the Super Co-contribution, when the taxpayer lodges the income tax return for the year, the item A3 labels should be completed. These amounts will pre-fill the Co-contributions What-if calculator. The ATO will use the information on the income tax return and the contribution information received from the superannuation fund or RSA to work out eligibility and automatically calculate and deposit the co-contribution to the taxpayer’s super account.

The Employment income from Salary and Wages amount is calculated by Tax and is the sum of Items 1, 2, 3, 4 and 9 (Salary or Wages income and lump sum payments from an employer including eligible termination payments, Allowances, earnings, tips, director's fees, etc., and Personal services income).

The preparer must enter the amount of the eligible personal superannuation contribution for which a deduction has not been claimed in the current year.

Back to Superannuation Dialogs

Spouse Superannuation Contribution Offset Worksheet

A maximum offset of $540 is available to taxpayers making non-deducted superannuation contributions on behalf of a spouse.

A spouse of a person includes another person (whether of the same sex or a different sex) with whom the person is in a registered relationship (prescribed for the purposes of s22B of the Acts Interpretation Act 1901), or another person who, although not legally married to the person, lives with the person on a genuine domestic basis in a relationship as a couple.

The taxpayer is eligible, if:

The contributions were non-deductible to the claimant
Both the taxpayer and spouse were Australian residents at the time the contributions were made
Both the taxpayer and spouse were living together permanently at the time the contributions were made
The sum of the spouse's assessable income plus reportable fringe benefits and reportable employer superannuation contributions for the year was less than $13,800

The offset is calculated as 18% of the lesser of:

$3000, reduced by $1 for every $1 that the spouse’s assessable income and total reportable fringe benefits amounts for the year was more than $10,800 and less than $13,800, or
The total of the contributions made by the taxpayer for the spouse.

Parameters

Eligible contributions: This is the amount of the eligible, non-deductible superannuation contributions made by the taxpayer on behalf of the spouse.

Spouse's adjustable income: This is the spouse’s assessable income plus reportable fringe benefits and Reportable employer superannuation contributions for the year. To be eligible for any portion of the offset, the spouse may not earn more than $13,800.

Offset: This field is calculated by the system in accordance with the formula described above.

Back to Tax Offsets Worksheets

Invalid and Invalid Carer Offset Details

These offsets are claimed in the Dependency Offsets Invalid and carer worksheet available at T6. The title bar of each worksheet will confirm for you which type of invalid or carer offset you are claiming.

In order to activate the relevant tab, you must complete the eligibility questions.

The worksheets for Invalid and invalid carer and invalid relatives are grouped as tabs on one screen including:

Eligibility
Invalid spouse or carer
Invalid relatives
Parents/Parents-in-law

For information on Invalid spouse, click this link to open the Individual return instructions 2017 on the ATO website.

Invalid

An invalid can be your:

Spouse
Parent
Child, aged 16 years old or older
Brother or sister, aged 16 years old or older
Spouse’s parent
Spouse’s child, aged 16 years old or older, or
Spouse’s brother or sister, aged 16 years old or older.

That person must be receiving:

A disability support pension under the Social Security Act 1991,
A special needs disability support pension under the Social Security Act 1991, or
An invalidity service pension under the Veterans’ Entitlement Act 1986.

Invalid carer

An invalid carer is your:

Spouse
Parent
Spouse’s parent

who is caring for your or your spouse’s invalid child aged 16 years or older, or your or your spouse’s invalid brother or sister aged 16 years old or older.

The invalid carer must be:

Receiving a carer allowance or carer payment under the Social Security Act 1991 in relation to caring for that person, or
Wholly engaged in providing care to that person and the person being cared for receives:
a disability support pension under the Social Security Act 1991
a special needs disability support pension under the Social Security Act 1991, or
an invalidity service pension under the Veterans’ Entitlement Act 1986.

For further information, click this link to open the Individual return instructions 2017 on the ATO website.

This offset is subject to the Adjusted Taxable Income (ATI) test. If the ATI of the taxpayer exceeds $100,000, this offset will be disallowed and will not be available to form part of the Base Amount for Zone offset purposes.

Invalid and invalid carer offsets and the Zone or overseas forces offset base amount.

Eligibility

With effect from 1 July 2015, if your normal residence is in a Zone (a Remote area being a Special or Ordinary Zone and you are eligible to claim a Zone or overseas forces offset at T4, the claim you make at T6 for your Invalid spouse or invalid carer offsets will form part of the base amount for Zone or overseas forces offset purposes.

A spouse can be married or de facto but must be residing with and maintained by the taxpayer. If the taxpayer has more than one spouse during the income year a part year rebate may be claimed for each.

Complete the details on the screen:

Name: This field is pre-filled from the spouse’s name field at the SD item and is for record keeping purposes only.

Days not eligible for FTB Part B at full/shared care rate or rec'd Parental leave pay: Enter the number of days the taxpayer maintained the Spouse where neither was entitled to FTB Part B or entitled to FTB Part B at a shared care rate or in receipt of Parental Leave Payments either from an employer or from Centrelink. The total number of days cannot exceed 365 (366 in a leap year).

Two sets of fields are provided to cater for events occurring at different times of the year.

No offset will be calculated until a number of days is entered.

No. of Days not eligible for Part B of FTB or entitled to Part B of FTB at a shared care rate: Enter the number of days the taxpayer maintained the Spouse where neither was entitled to FTB Part B or entitled to FTB Part B at a shared care rate. The total number of days cannot exceed 365 (366 in a leap year).

Two sets of fields are provided to cater for events occurring at different times of the year.

No offset will be calculated until a number of days is entered.

Spouse’s Adjusted Taxable Income: This value is defaulted from the ATI calculated at the spouse details item SD.

ATI is defined as comprising all income derived during the year, less deductions for expenses paid to earn that income, and includes exempt income from invalid pensions, war pensions, reserve forces pay, scholarships, bursaries, educational assistance, maintenance payments not used to support dependants and also includes Reportable Fringe Benefits * .510, plus Reportable superannuation contributions, plus Net financial investment losses less child care that the taxpayer paid to a person other than their partner. ATI does not include parenting allowance and other family and child disability allowances, severance or retirement payment of a capital nature.

Offset: If an offset is available it is calculated and shown at this field. At the same time it is passed to the Base amount of the Zone rebate worksheet and will only be activated if you are eligible for, and claim the Zone offset.

Invalid relatives

Eligibility for Zone or overseas forces offset base amount

With effect from 1 July 2015, if your normal residence is in a Zone (a Remote area being a Special or Ordinary Zone and you are eligible to claim a Zone or overseas forces offset at T4, the claim you make at T6 for your Invalid spouse or invalid carer offsets will form part of the base amount for Zone or overseas forces offset purposes.

This offset is subject to the Adjusted Taxable Income (ATI) test. If the ATI of the taxpayer exceeds $100,000, this offset will be disallowed and will not be available to form part of the Base Amount for Zone offset purposes.

An offset of $2,627 is available for each invalid relative a taxpayer maintains provided that the invalid relative has ATI of less than $286. A reduced offset will be calculated for ATI over $285 and will shade out at $1 for every $4 over $285 ($10,790).

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Adjusted Taxable Income: Enter the relative’s adjusted Taxable Income.

Number of Days: Enter the number of days the taxpayer maintained the invalid relative.

Proportion: Enter as a percentage the taxpayer's contribution to the maintenance of the invalid relative.

When this worksheet is being completed for a Dependent relative it will bear the reminder:

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Parents/Parents-in-law

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Eligibility for zone or overseas forces offset base amount

With effect from 1 July 2015, if your normal residence is in a Zone (a Remote area being a Special or Ordinary Zone and you are eligible to claim a Zone or overseas forces offset at T4, the claim you make at T6 for your Invalid spouse or invalid carer offsets will form part of the base amount for Zone or overseas forces offset purposes.

This offset is subject to the Adjusted Taxable Income (ATI) test. If the combined ATI of the taxpayer and spouse exceeds $100,000, this offset will be disallowed and will not be available to form part of the Base Amount for Zone offset purposes.

An offset of $2,627 is available for each parent or parent-in-law a taxpayer maintains provided that parent or parent-in-law has ATI of less than $286. A reduced offset will be calculated for ATI over $285 and will shade out at $1 for every $4 over $285 ($10,790).

Adjusted Taxable Income: Enter your carer parent’s or parent-in-law’s adjusted taxable income (ATI).

Number of Days: Enter the number of days the taxpayer maintained the parent or parent-in-law.

Proportion: Enter as a percentage the taxpayer's contribution to the maintenance of the parent or parent-in-law.

Back to Tax Offsets Worksheets

Depreciation worksheet (d)

The help pages accessed for this worksheet include:

How to Complete the Depreciation Worksheet
Project Pool Details
Asset Details
Balancing Adjustment Offsetting
Disposal
Asset Integration
PC Effective Life Adjustment
Batch Update
Batch Update: Pooling
Batch Update: Re-Group
Pool Properties - Details Tab
Pool Properties - Integration Tab
Software Development Pool - (5 year) - Details Tab
Software Development Pool - (5 year) - Integration Tab
SBE Integration of Pool deduction: Share Index

Back to Supporting schedules and worksheets

Depreciation Asset Index

Each asset has its own worksheet and as assets are entered and saved, an entry is made in the Index. The index also offers entry to other dialogs that assist with the complexities of managing depreciating assets, pooled or otherwise, and projects.

The column headings in the Index are self-explanatory, but are further explained under Column Headings.

The Buttons on the right behave as follows:

Properties: Properties refers to the details of the asset worksheet selected. Highlight the required Asset in the Index and click Properties to open the Depreciation worksheet.

Batch update: Permits one or more assets to be flagged for integration to the selected schedule, worksheet or item in the return, or to be added to an established Pool.

Create Project: Click Create Project to open a worksheet to capture all the details related to the project from which the system will calculate the allowable deduction.

Create Pool: Click Create Pool to open a worksheet to capture all the details related to the Pool.

Create 5yr SWDP: Click Create 5yr SWDP to open a worksheet to capture all the details related to the Software Development Pool.

Check SBE eligibility: Click Check SBE eligibility to open the SBE Eligibility worksheets, which must be completed each year to ensure that the business is still eligible to use the simplified depreciation rules.

New: Click New to create a new asset to be depreciated.

Delete: Click Delete to remove the highlighted asset from the Index.

Close: Click Close to integrate values to the schedule and worksheet items as indicated in the Integ column and close the Depreciating Assets Index.

Populate Return labels: Ticking this box causes the program to add up the various components and complete the relevant labels in the relevant return. Relevant returns are Company, Partnership and Trust. If you do not choose to integrate, then labels in the main return may be completed manually.

Column Headings

Group: The Group code may be alpha or numeric and assets NOT allocated to a Pool should always be part of a group. For example where the taxpayer has more than one rental property or operates more than one business, a group should be created for each. The reason being that the depreciation calculated on those assets integrates to the correct rental schedule or any other schedule selected for integration.

Clicking the column heading will reverse the sequence of the list.

AE and Series 6 & 8 only: To save typing frequently used asset descriptions each time an asset is created, add the description for certain commonly named assets to your Index of Standard answers and at the description field, click [F7], [F10] and choose the description, or if the description code is known, key ^ plus the code and the description will default to the field.

Item: Each Asset is given its own ID within the group and when new assets are created and the Group code is entered, this causes the next consecutive number in the range 00001 to 99999 to be applied to this asset.

Integ: This is the abbreviation for ‘Integration’. This column displays the code of the form, schedule or, worksheet to which the depreciation amount is integrated.

Integration of the Depreciation amount calculated occurs when you Close the index of assets.

Pool: Assets that have been added to the pool will display the number of the pool in this column.

Description: This column will display the description keyed for the type of Pool, for example, General Small Business Pool, or the asset description, for example, Carpet.

Tab Cards

Details (this is the main data entry screen) - refer to Asset Details
Disposal - refer to Disposal
Integration - refer to Asset Integration
Prime Cost Changing Effective Life - refer to PC Effective Life Adjustment

Back to Depreciation worksheet (d)

Project Pool Details

Under the Uniform Capital Allowances (UCA), you can allocate to a project pool certain capital expenditure incurred after 30 June 2001 that is directly connected with a project you carry on (or propose to carry on) for a taxable purpose, and write it off over the project life. Each project has a separate project pool.

The project must be of sufficient substance and be sufficiently identified that it can be shown that the capital expenditure said to be a 'project amount' is directly connected with the project.

A project is carried on if it involves some form of continuing activity. The holding of a passive investment such as a rental property would not have sufficient activity to constitute the carrying on of a project. The capital expenditure is known as a 'project amount' and is expenditure incurred:

to create or upgrade community infrastructure for a community associated with the project; this expenditure must be paid (not just incurred) to be a project amount
for site preparation costs for depreciating assets (other than draining swamp or low-lying land, or clearing land for horticultural plants)
for feasibility studies or environmental assessments for the project
to obtain information associated with the project
in seeking to obtain a right to intellectual property
for ornamental trees or shrubs

To create a Project Pool, at the Depreciation worksheet index click Create Project or [Alt+T] to open the Project Pool dialog. The fields offered for data entry include:

Group: This refers to a group of projects (for example, Feasibility Studies). Enter a letter or number as a code to define the group to which this type of project will belong. The Group code may be left blank. Refer to Batch Update: Re-Group .

Group Description: Enter a description of the type of projects held in the group. For AE and Series 6 & 8, if you have Standard answers set up, click [F7] to select a description.

Type: This will determine where the integration point will be in the main return, schedule or worksheet.

For the Individual return if a Business project is selected, integration will be to Schedule B and then to the Reconciliation adjustment Item P8 Label L. If a Personal project is selected, the integration will be to Item D6 Low value pool deduction.
For non-individual entities, if a Business project is selected integration will be to the reconciliation adjustment worksheets for the different types of returns, otherwise there will be no integration to any schedule or income tax return label.

Project No.: Enter a number to distinguish this project from other projects within a group. When entering the details of a new project belonging to an existing group, specifying the Group code causes the next consecutive number in the range, 00001 to 99999, to be applied.

Project Description: Enter a description of the project (for example, Copper Mine Feasibility). For AE and Series 6 & 8, click [F7] to select a Standard answer, otherwise type a description.

For AE and Series 6 & 8, avoid duplication - if the descriptions of two or more assets are the same, make some distinction in the first 20 characters.

Completed/abandoned/sold project: If this option is selected the entire undeducted value of the project will become deductible. The amount in the opening balance, plus all the amounts entered in the project this year (environmental impact assessment, mining and transport, other expenditure) will be shown in the Decline in Value field and the closing balance of the project will become zero.

Date Project Commenced: Enter the date that the project commenced.

Expected Project Life: Enter in this field the number of years and fractions of a year you anticipate the project will run. To qualify for this allowance, the life of the Project must be known, that is it must have a start date and an anticipated end date from which the number of years or fractions of years is calculated. Each year you must estimate the project life and change it if the project circumstances have changed so that the life is less than it was at the beginning, or it is anticipated to run for a longer period than was first estimated. Tax will use this figure to calculate the deduction.

Extent Project used for Income Production: Enter a value for the extent to which the project is used for producing income. This will be used to determine the decline in value calculated. For example, if you enter 6%, the calculation for the deductible decline in value will be multiplied by 6%.

Primary Production Portion: If applicable enter the value for the extent to which the per cent used for producing income relates to a Primary Production Business. This field applies only to Individual, Trust and Partnership returns.

Opening balance of project pool: If this is not the first year in the life of the pool, enter the opening balance of the project. Typically in the first year of a project the opening balance will be zero. In future years the opening balance of the project will be defaulted to be the same as the closing balance of the preceding year.

Environmental impact assessment expenditure: Enter the environmental impact assessment expense for the project. All expenditure entered will be included in the calculation of the project decline in value.

Mining and/or transport capital expenditure: Enter the mining and/or transport capital expenditure. All expenditure entered will be included in the calculation of the project decline in value.

Other: Enter the amount of any other related expenditure for the project. All expenditure entered will be included in the calculation of the project decline in value.

Decline in Value: This field will show the amount calculated for the decline in value. The amount calculated is the total of the opening balance and all expenditure this year, multiplied by the rate of decline for this year. This value is calculated for the whole year, regardless of when the expense was incurred.

Closing Balance: This field stores the closing balance of the pool. This amount is calculated by adding the opening balance to the current year expenditure, and deducting the decline in value for the year.

% Rate this Year: This is the rate of decline of the project for the year. It is calculated by dividing 150% or 200% by the project life. For example, a 10-year project will be written off at a rate of 15% or 20%.

For Projects commencing before 10 May 2006, a deduction rate of 150% is used for projects that started to operate before that date OR a project that started to operate on or after that date where the project pool contains project amounts incurred before that date. You CANNOT use the higher rate if, on or after 10 May 2006, the taxpayer abandons, sells or otherwise disposes of an existing project then restarts operating the project in order to calculate the deduction using the higher rate.

Where the project pool contains only project amounts incurred on or after 10 May 2006 and the project started to operate on or after that date, the deduction rate is 200%.

Deduction claimed for decline in Value: This is the amount of decline in value that will be integrated to the return. This value is calculated by multiplying the Decline in Value by the Extent project used for income production field.

Totals: This is a summary of the decline in value calculated. It will show the total for the entire return at the Return field and the total for the group at the Group field.

Asset Details

Pool: Before an Asset can be entered in the Pool, the Pool into which it is to be put must be established. At the Depreciation Index click Create pool to add a new pool. From the Pool field in the worksheet click [F10] and select from the list of Pools or add the details of the new pool to be selected.

Assets may be allocated to the General small business pool, a low-value pool (LVP) or a software development pool (SDP).

For Small business entities with assets that can be immediately written off, the Pool Number should be set to zero (0) and the method of depreciation should be I - Immediate Write-Off.

General small business pool – temporary accelerated depreciation from 12 May 2015

In the 2015-16 Budget, the Government announced a number of measures as part of a jobs and small business package, including expanding accelerated depreciation for small businesses. Increasing the immediate deduction for capital expenditures improves a small business’ cash flow.

Recent changes to the law temporarily increase the threshold for assets that can be immediately written off from $1,000 to $20,000. This change applies to:

assets that were first acquired at or after 7.30pm AEST of 12 May 2015, and
first used or installed ready for use on or before 30 June 2017.

Assets that do not satisfy these timing requirements continue to be subject to the $1,000 threshold.

General small business pool – temporary accelerated depreciation from 12 May 2015

Recent changes to the law temporarily increase the threshold for assets that can be immediately written off from $1,000 to $20,000. This change applies to:

assets that were first acquired at or after 7.30pm AEST of 12 May 2015, and
first used or installed ready for use on or before 30 June 2017.

Assets that do not satisfy these timing requirements continue to be subject to the $1,000 threshold.

Small business entities can claim an immediate deduction for certain depreciating assets that cost less than $20,000, provided the asset is first acquired at or after 7.30 pm, by legal time in the Australian Capital Territory, on 12 May 2015, and first used or installed ready for use on or before 30 June 2018. Depreciating assets that do not meet these timing requirements continue to be subject to the $1,000 threshold. This applies to both new assets and the second element of cost to an existing asset, where the second element of cost occurred on or after 12 May, 2015.
Small business entities can claim an immediate deduction for depreciating assets that cost less than $1,000 if the asset is first used or installed ready for use on or after 1 July 2016.
The write off value of the pool at 30 June 2017 is $20,000.
Primary producers may deduct capital expenditure on a fodder storage asset over three years. Therefore, a new Method with the description: ‘Fodder storage’ with a depreciation rate of 33.333% has been created and is available for selection from the drop-down list at ‘Method’.
Primary producers may deduct capital expenditure on a water facility in the year in which the expenditure is incurred. There are now two options on the Method drop down list for Water facilities. The first is for assets purchased or held ready for use before 12 May 2015 (depreciation rate 33.333%) and the second for assets purchased or held ready for use on or after 11 May 2015 (depreciation rate 100%).
Primary producers may deduct capital expenditure on a fencing asset in the year in which the expenditure is incurred. A new Method for Fencing with a depreciation rate of 100% is available to be selected from the drop down list at Method.

The functionality for immediate write-off is limited where an addition to an existing asset - a second element of cost - that is less than $20,000 applies.

For full information on Setting up and managing Pools, refer to Pool Properties - Details Tab.

Group: This refers to a group of assets (for example, Fixtures and Fittings). Enter a letter or number as a code to define the group to which this type of asset will belong. The group code may be left blank, although this is not advised. Selecting a Group assists greatly when some of your assets are used in earning assessable income other than business income or rental income. Refer to Batch Update.

Group Description: A description of the type of assets held in the group (for example, Fixtures and Fittings) should be entered. For AE and Series 6 & 8, click [F7] to select a Standard answer, or type the description.

Asset No.: When the Group is first established, you will need to enter an Asset number (usually 1). After that whenever that Group code is chosen, the Asset number will be automatically augmented by one. There is no limit to the number of assets that may be created for a particular group, however as mentioned previously you would not put all your Fixture and Fittings type assets in the same Group unless all the assets in the Group were used for the same purpose. You might therefore call the business fixtures and fittings 'Office Fixtures and Fittings' or 'Office furniture and Equipment' and your Rental Property fixture and fittings 'Property Fixtures and Fittings' and each group's depreciation calculated would be integrated to a different item in the return or worksheet.

Asset Description: When entering the assets description, make the description as short as possible so that you can identify it easily. The reason for this is that the depreciation worksheet print-out does not have a large amount of space for the description and will wrap them so that the print-out may become quite long if an Asset description were to wrap over 3 or 4 lines. For AE and Series 6 & 8, click [F7] to select a Standard answer, or type the description.

Type: The default is ‘Other tangible asset’. Click [F10] to display a list of the types of depreciating asset. It is important to select the correct type as calculation of the deduction and integration to main form labels depends on the type selected.

This is a list of the types of depreciating assets:

Motor vehicle DCL
Motor vehicle (fuel efficient)
Motor vehicles (not subject to the Luxury car Limit (DCL))
Intangible Asset
Exploration/Prospecting Tangible
Personal use
Collectable
Other tangible asset.

Item Details

Date purchased: This is the date that the depreciating asset was first purchased and is for record keeping purposes. The date entered in this field will be defaulted to the Date first used/held ready for use field. It is that date that will be used as the Start Date to calculate depreciation. If the date first used or held ready is different, edit that date to contain the Start date from which depreciation is to be calculated.

Date first used/held ready: For newly created assets enter the date the asset was first used or held ready for use for a taxable purpose. This date will be the date from which depreciation will start to be calculated. The date entered must be in the format ddmmccyy and must be in the current tax year or substituted accounting period.

First element cost (purchase cost): The original cost of the asset is entered in this field. This amount should be net of any input tax credits.

The Value for depreciation field will be adjusted for any Luxury car limit (DCL) applying tor motor vehicles.

Second element costs (incurred this year): Enter any second elements of cost for the asset. The amount entered should be net of any input tax credits. This field is disabled for items assigned to a Software Development Pool (SDP).

CY Balancing Adjustment: Enter any balancing adjustment for the asset.

This does not apply to pooled items.

Opening Adjustable Value (OWDV): In the first year you must key the Opening Adjustable value which is the sum of the first three fields. This is the amount on which depreciation for the current year will be calculated.

Method: The letter shown at this field controls the manner in which depreciation will be calculated. The default code is the diminishing value method. This field is disabled for pooled items as the depreciation rate for these items is controlled by the pool to which they are allocated.

Once you have chosen a method for a group of assets, each new asset created in that group will have the same depreciation method.

This is a list of depreciation codes and the method of depreciation:

P: Prime cost
D: Diminishing value
I: Immediate write-off
W: Water facilities pre-12 May 2015
A: Water facilities from 1 July 2015
H: Horticultural plants
G: Grapevines
B: Business related (s80-440)
E: Electricity

Additional Codes for Primary Producers and other businesses dealing with Water facilities were created in MYOB tax for the income year ending 30 June 2015 and will remain in force until 30 June 2017.

Fodder Storage (write off over 3 years)
Fencing assets (100% IWO)
Water facilities pre 12 May 2015
Water facilities – From 12 May 2015

Effective Life: Enter the effective life of the item in years, as published by the ATO or as self-assessed.

Self-assessed: If you have self-assessed the effective life of the asset, tick this box.

This checkbox only becomes active once the annual rate has been entered.

% Annual Rate: Enter the percentage rate applicable to the method selected.

% Private Use: Where the asset is used partly for business and partly for private purposes, the depreciation calculated will be apportioned on the basis of the amount entered at this field.

To more correctly calculate profit on sale where a private use percentage applies to an asset in the Small Business Pool, the relevant private use proportion for each asset must be entered separately.

Allocated this year: Tick this checkbox to indicate that the asset was allocated to the pool in the current income year. Assets allocated to the pool in the current year use the half rate decline in value.

Accumulated private use: Where a previously depreciated asset is being entered in Tax for the first time, you must enter this amount. For subsequent years, this amount will be managed by the system and updated each year.

Accumulated 2nd elts. amts: Where a previously depreciated asset is being entered in Tax for the first time, you must enter this amount. For subsequent years, this amount will be managed by the system and updated each year.

Accumulated bal. charges: Where a previously depreciated asset is being entered in Tax for the first time, you must enter this amount. For subsequent years, this amount will be managed by the system and updated each year.

The closed fields in the right lower corner are self-explanatory and are auto calculated by Tax.

Back to Depreciation worksheet (d)

Balancing Adjustment Offsetting

Other than for involuntary disposals and disposals made on or after 21 September 1999, this offsetting function is only available to small business taxpayers using the simplified depreciation rules.

A balancing adjustment offset is available for plant compulsorily acquired, lost or destroyed after the introduction of the Uniform Capital Allowances (UCA) rules.

What happens if you no longer hold or use a Depreciating Asset?

If you cease to hold or to use a depreciating asset, a balancing adjustment event may occur. If there is a balancing adjustment event, you need to calculate a balancing adjustment amount to include in your assessable income or to claim as a deduction.

A balancing adjustment event occurs for a depreciating asset when:

you stop holding it – for example, if the asset is sold, lost or destroyed
you stop using it and expect never to use it again
you stop having it installed ready for use and you expect never to install it ready for use again
you have not used it and decide never to use it, or
a change occurs in the holding or interests in an asset which was or is to become a partnership asset.

A balancing adjustment event does not occur just because a depreciating asset is split or merged.

However, a balancing adjustment event does occur if you stop holding part of a depreciating asset.

Expenses of a balancing adjustment event (such as advertising or commission expenses) may be included in the second element of the cost of the depreciating asset.

You work out the balancing adjustment amount by comparing the asset's termination value (such as the proceeds from the sale of an asset) and its adjustable value at the time of the balancing adjustment event

If the termination value is greater than the adjustable value, you include the excess in your assessable income.

If the termination value is less than the adjustable value, you can deduct the difference.

For the Guide to depreciating assets refer to Capital Gains Tax and depreciating Assets on the ATO website.

Situations where general balancing adjustment rules do not apply:

If a depreciating asset has been partly used for other than a taxable purpose, the balancing adjustment amount is reduced to reflect only the taxable use. Additionally, a capital gain or capital loss can arise to the extent of the use for other than a taxable purpose.
Similarly, if the depreciating asset is a leisure facility or a boat and your deductions for the decline in value of the asset have been reduced, the balancing adjustment amount is reduced and a capital gain or capital loss can arise.
There are special balancing adjustment rules for cars.
A balancing adjustment event for a depreciating asset in a low-value or common-rate pool or for which expenditure has been allocated to a software development pool is dealt with under specific rules for those pools.
If the disposal of a depreciating asset is involuntary, you may be able to offset an assessable balancing adjustment amount.
Rollover relief may apply to the disposal of a depreciating asset in certain circumstances, such as where an asset is transferred between spouses pursuant to a court order following a marriage breakdown.
There are no specific balancing adjustment rules for some primary production depreciating assets or certain depreciating assets used for landcare operations, electricity connections or telephone lines. However, such assets may be considered part of land for capital gains tax purposes.
There are special balancing adjustment rules for depreciating assets used in carrying on research and development activities. Refer to the Research and development tax concession schedule instructions for the current income year for more information.
A GST liability will generally occur when a depreciating asset is disposed of by a GST registered entity. The ATO has provided on its website a fact sheet GST and the Disposal of capital assets (NAT 7682-11.2004), for more information.

The legislation has the effect of:

removing the option to offset any assessable balancing adjustment amount against replacement plant for balancing adjustment events occurring after 11.45 a.m. AEST on 21 September 1999 (time of announcement) for all taxpayers, with the exception of small business taxpayers; and
providing a new balancing adjustment offset that is to be made available for certain involuntary disposals of plant occurring after the time of announcement (broadly, where CGT roll-over relief for involuntary disposals was previously available).

Maintaining the balancing adjustment offset for small business taxpayers was an interim measure until 1 July 2001.

Division 42 of the ITAA 1997 (depreciation of plant) permitted a taxpayer who had disposed of depreciable plant for an amount that exceeded its depreciated value to elect to offset any assessable balancing adjustment amount against the cost or written-down value of replacement or other plant.

The balancing adjustment offset gave greatest benefit to taxpayers who held plant for which depreciation allowances are significantly accelerated and for which there was an active second-hand market. Such taxpayers obtained a significant benefit from the further tax deferral inherent in the offset mechanism. Taxpayers with assets where there was less acceleration of depreciation or no ready second-hand market obtained little advantage comparatively.

Back to Depreciation worksheet (d)

Disposal

When disposing of motor vehicles subject to the depreciation cost limit the balancing charge will be calculated using the original cost of the vehicle as the 'cost on acquisition'.

Disposal date: Only dates in the current year, or substituted accounting period may be entered. Enter the date in the format DD-MM-CCYY.

Consideration: Enter the proceeds on sale of the asset.

Adjustments on Disposal

Assessable: This represents the assessable balancing adjustment of an asset on disposal and is calculated as follows:

Where:

C = Consideration

A = Adjustable value at date of disposal

O = Overall business use percentage

This field is only calculated if the disposal amount is greater than the undeducted cost. If this amount is not applied as a Balancing adjustment to a replacement asset, then you must allocate the balancing adjustment on sale to the relevant income label in the return so that it is included in assessable income. See below for Balancing adjustment (on disposal).

Deductible: This represents the deductible balancing adjustment amount on the disposal of an asset and is calculated as follows:

Where:

A = Adjustable value at date of disposal

C = Consideration

O = Overall business use percentage

This amount is only calculated if the undeducted cost is greater than the disposal amount.

Capital Gain/Loss: This field will calculate the capital gain or loss on the private use portion of assets that were disposed of during the year. It is calculated as:

[Purchase price

—

Consideration]

X

Overall private use

This calculation is not done for assets in a general small business pool, Motor Vehicles, personal use assets or collectables. The amount does not integrate to the return and any capital gain or loss must be entered at the Capital Gains item in the return or into the Capital Gains worksheet (g).

Balancing Adjustment (on disposal): Either an Assessable balancing adjustment or a Deductible balancing adjustment may be calculated on disposal of the asset. Tax provides for the allocation of that assessable or deductible amount in the disposal dialog. Select the schedule or item that the amount should integrate to from the list on the right-hand side of the dialog.

For disposals on or after 21 September 1999, this offsetting function is only available to small business taxpayers using the simplified depreciation rules. If you elect to offset the assessable balancing adjustment against a replacement asset, you should enter that amount in the CY balancing adjustment field when creating the replacement asset so that the value for depreciation is correctly adjusted.

Examples

If you select to integrate to the Reconciliation worksheet, Tax needs to know whether the deduction is for Primary Production or Non-Primary Production income and will prompt you to select this at the Schedule item field.
If you are integrating the asset to a Rental schedule and Tax detects that there is more than one Rental schedule for the taxpayer, you will be prompted to identify the Rental Property that the asset belongs to at the Schedule number field.
If you are integrating to the ATO work-related expenses schedule (W), you will need to tell Tax which Item in the schedule and which entry at the item, so both the Schedule item and the Entry number fields are required to be completed.

Schedule number: This field defaults to 1. If there is more than one of a particular schedule, say Rental, you will need to select the right rental schedule from the list where the property will be identified by the first line of address. If you have entered the assets prior to creating the Rental schedule, Tax will create a blank Rental schedule to attach this depreciation amount to. Those worksheets and schedules for which multiples are allowed are marked (Y) in the table above.

Schedule item: This field is only active for these schedules:

Individual return Work-related expenses items D2, D5 and gifts D10 grids
Reconciliation worksheet (a) where Tax needs to know the type of income (PP or Non-PP); or
Distributions received from Partnerships worksheet (dip) and Distributions received from Trusts worksheet (dit) where tax needs to know the type of income (PP or Non-PP – the default is Non-PP)
for Schedule W (ATO work expenses) Tax needs to know which item number in the Schedule W and which entry in that item.

Entry number: This field relates solely to the schedule W, which is made up of multiple items and allows multiple entries within those items. For example, if you have completed item D5 Other work-related deductions and you have 10 entries, this field determines which entry will receive the depreciation deduction amount.

Any depreciation calculated for an asset where an integration point has not been chosen will not be included at any label in any of the main forms.

How to add a new entry to allocate the pool deduction:

Click New.
Select the appropriate business schedule (b or c). If you have not previously created the selected worksheet, Tax will create it, giving it the number 1. Where more than one Business schedule of the same type exists, select the relevant schedule.
Enter the percentage amount of decline in value to be integrated to that worksheet. The total decline in value for the pool will be multiplied by this amount for integration.
Click OK to accept the entry.

When you have completed the allocation, click OK.

Integration will also occur to the Small business entity depreciation asset item in the relevant return via the Small business depreciating assets worksheet (sda). Refer to Small business entity depreciating assets worksheet (sda).

Back to Depreciation worksheet (d)

SBE Private Use

Introduction

Assets that have been entered in the General small business pool must have their business use assessed each year. Where there is a change to business use and the change is greater than 10 percentage points, an adjustment to the opening balance of the pool must be made.

The Small business SBE Private Use tab will only ever be active where assets have been added to the General small business pool.

When adjustment to private use is not needed

For the General small business pool, the adjustment to private use does not need to be made once the asset has been pooled for 4 years.

Former STS taxpayers no longer using the Simplified depreciation rules may not adjust the private use and may not add anything to the General small Business Pool.

They may only dispose of depreciating assets.

Reduction factor and Adjustment to opening pool balance

The reduction factor and adjustment to the opening pool balance will be calculated automatically based on the data entered. The fields involved in the calculation include:

Tax Year added to the pool: This will be derived from the Asset Details previously entered and is used to determine whether an adjustment needs to be made or not.

Asset purchased while SBE taxpayer: The reduction factor is based on whether the asset was first held while the taxpayer was a Small business entity or before. This information allows the correct adjustment factor to be used.

Last private use: Enter the percentage of private use for this asset at the time the percentage last changed.

Present year private use: Enter the percentage of private use for this asset since the time the percentage last changed.

Asset value: Enter the asset value. Broadly this is the cost or written-down value of the asset at the time it was pooled.

Formula:

The formula to calculate the change is as follows:

Asset Value

X

Reduction Factor

X

(Present Year Estimate – Last Estimate)

Calculating New Effective Life for Plant

Taxpayers, other than small business taxpayers, now have the option to calculate a new effective life for plant acquired after 11.45 a.m. AEST on 21 September 1999 (time of announcement). Small business taxpayers will maintain access to accelerated depreciation.

This law permits taxpayers to vary, either up or down, the effective life of plant acquired after the time of announcement. This measure is designed to allow taxpayers to have regard to changing market or technological developments, or other factors connected with usage, that influence the length of time over which an asset can be used to produce income.

The ability to vary effective life is available to taxpayers regardless of whether they have originally assessed an asset's effective life or adopted an effective life from the Commissioner's schedule.

Under the new law taxpayers can adopt a new effective life if changes to circumstance, such as market development, reveal a previous estimate to be inaccurate. Previously, taxpayers did not have this flexibility.

Back to Depreciation worksheet (d)

Batch Update

The Batch Update functionality allows you to move assets around one or more at a time. For example, assets may be moved from one group to another, or a group of assets may be selected to be integrated to, say, a Rental schedule, or one or many assets may be moved into a pool.

Batch Update options are:

Pool - refer to Batch Update: Pooling
Integration - refer to Asset Integration
Re-group - refer to Batch Update: Re-Group

Before any of these options can be used, you must select the assets that are to be pooled, integrated or re-grouped.

Select: Click Select ticks the highlighted asset only to include it in the process. Click Select a second time removes a tick.

Select all: - Click Select all ticks all assets in the Index.

Back to Depreciation worksheet (d)

Batch Update: Pooling

Code: The code field id (identification) is maintained by Tax and will be defaulted where the pool has been established.

Number: This is the Number of the pool and where more than one pool has been created, click [F10] to list those pools.

Entering zero at this field will remove the highlighted asset(s) from the nominated pool.

Allocated to Pool this Year: Tick this checkbox when assets are being added to the pool for the first time this current year so that depreciation is correctly calculated at the half pool rate. The pool balance will be updated with the asset details based on the start date entered for each asset.

Assets acquired in a prior year will be allocated to the pool and will be deducted at the full rate of decline. Assets acquired in the current year will be allocated to the pool and deducted at half rate.

If this option is not selected, the assets will be assumed to have been pooled in a prior year and, thus, will not affect the pool balance for this year. A manual adjustment to the opening balance of the pool should be made if required.

OK: Click OK to save the settings as shown.

Back to Depreciation worksheet (d)

Batch Update: Re-Group

The Re-group function allows you to move one or more assets from one group to another Group, whether the assets are pooled or not.

Code: This is the code of the Group to which the asset currently belongs. When you enter a Code in the range A-Z or 1-9, if the code entered already exists the asset will be added to that Group. If it does not exist, Tax will create a Group with that code and move the asset(s) to it.

Description: The description defaulted is that of the original Group, if you have changed the Code to a new Group, you must enter a description for that new Group by overtyping the text.

OK: Click OK to accept the changes.

Back to Depreciation worksheet (d)

Pool Properties - Details Tab

For information on Software Development Pools, refer to Software Development Pool - (5 year) - Details Tab.

When you select to create a Pool, details of the Pool need to be established and integration to the tax return either directly or via another worksheet needs to be established. For example, in the Individual tax return, integration of a Low Value Pool (LVP) may be to Item D6 or to the Reconciliation worksheet (Schedule A).

Number: If this is the first pool, the number 1 will be defaulted to this field. If you create more than one pool, number them in sequence.

Type of Pool: Select the type of pool from the list. Each return can have one only of the following pool types:

Low Value Pool (LVP)
Software Development Pool (SDP)
General Small Business Pool (SBE)

Once a Pool type has been selected, it is removed from the list of Pools that may be created.

Description: Enter a description of the pool. For AE and Series 6 & 8, click [F7] to select a Standard answer, or type the description.

Adjustable value (OWDV): Enter the opening adjustable value of the Pool. Once entered, the value of the pool will be managed by Tax and the Closing balance rolled over each year to become the opening adjustable value of the pool in the next year.

Method: This field is only open to edit where the Pool type is Software Development. If this is not the first year in the life of the Pool, enter the relevant year or select a number between 2 and 4 from the list.

Primary production proportion: Where the Pool contains assets used for both Primary Production and Non-Primary Production business purposes, Tax needs to know the percentage use for PP Income activities. This field is only enabled when the pool type is LVP or Software Development.

As will be noted the fields that are greyed out are either not appropriate to the Pool type or are values calculated by Tax.

The Buttons on the right behave in the following manner:

Properties: The Properties button is not activated until at least one entry has been created and is displayed in the Index. Once an entry has been created and exists in the Index, highlighting it and selecting Properties will open that entry for editing purposes.

New: Click New to create a new entry.

Delete: Click Delete to remove the highlighted entry from the Index.

Column Headings:

Schedule: The Schedule column displays the Tax internal code of the Schedule you have selected to integrate the Pool deduction amount to.

Number: The Number column displays the number of the Business schedule where the return contains one or more of that particular schedule.

Share: The Share column displays the percentage of the Pool deduction for the Schedule selected in Column 1.

Description: Displays the name of the Schedule to which integration will occur.

Description: This column will display the description keyed for the asset: for example, Carpet.

Back to Depreciation worksheet (d)

Software Development Pool - (5 year) - Details Tab

There has been a change to the write-off life of the Software development pool effective from 1 July 2015 where the life of the pool is increased to 5 years with following depreciation rates each year.

For expenditure incurred from 1 July 2015:

Year 1 – Nil
Year 2 – 30%
Year 3 – 30%
Year 4 – 30%
Year 5 – 10%

For more details, see the ATO In-house software resources.

When you click Create 5 year SWDP, details of the software development pool need to be established, and integration to the tax return (either directly or via another worksheet) also needs to be established.

Description: Enter a description of the pool. Press F7 to select a Standard answer, or type the description.

Number: If this is the first pool, this field defaults to number 1.

If you create more than one pool, number them in sequence.

The software development pool number is included in the other pool numbering sequence. For example, if you already have a General Small Business pool, number 2 will be assigned to Software Development pool (5Yr) when it is created.

Income year pool commenced: This is the year where the software development pool commenced. The decline value will be calculated based on this year.

Current year: Current Tax year of the return.

Expenditure incurred in year 1: All the expenditure incurred in year 1 for the software development in the following categories:

Software costs
Licensing costs
Other costs.

Opening balance (OWDV): The opening balance is calculated from the second year onwards.

Decline in value: The opening balance is automatically calculated based on the information given from the second year onwards. Decline in value for the first year is always zero.

Software Development Pool - (5 year) - Integration Tab

This function allows you to indicate the point in the return or another worksheet, that the amount calculated should be integrated. Press F10 and select from the list of forms and schedules. The integration points provided will be relevant to the form type being prepared.

Distributions from Partnerships worksheet (dip)

This worksheet will be created automatically if any distribution to this return is sourced from a partnership return that is prepared by the practice. Alternatively you can use the dip worksheet to enter details of distributions received from other Partnerships. Amounts entered will be integrated to the relevant item labels in the main return. Once the Index is created, select an existing schedule if editing, or New to create a blank worksheet.

Where the dip is prepared for an individual there are additional fields that need to be reviewed. These fields are required by the ATO to be transmitted with the lodged return and you must fill them in to report the dissection of income and deductions related to financial investment and to rental property income or loss and any deductions related to that income.

The new field Share of net small business income is required for the calculation of the Small Business Tax Offset (SBTO). With effect from 1 July 2016, the SBTO is available to individuals who are sole traders or partners in a partnership that is a small business entity or beneficiaries of a trust that is a small business entity. This offset has been introduced so as not to preclude non-corporate business entities from benefiting from the reduction in the rate of company tax rate from 30% to 27.5% for corporate small business entities. The amount of net small business income will integrate to label D.

The worksheet is made up of the:

Share of Partnership PP and Non-PP income and credits.
Share of partner’s own deductions relating to landcare operations and water conservation and another expense deductions the partner personally incurred related to that share of income and not the expenses incurred by the distributing Partnership or Trust.

Where the taxpayer is carrying on a primary production business and participating in the Averaging System, but who has not received a distribution of primary production income for the year, a zero must be entered at either of the PP or Non-PP income labels to indicate to the ATO that NO distribution from other Partnerships or Trusts has been made this income year, but that averaging is still in effect. Failure to do so will prompt the ATO to query whether the taxpayer is electing to exit the averaging system.

For a full description of the types of income, credits and deductions allowable read Distributions from Partnerships and Trusts explanations and guidelines, Item 13-Partnerships and Trusts .

Integration to the dip from other worksheets

Integration is provided to the dip worksheet from:

the depreciation worksheet (d), and
the Motor vehicle worksheet (mve).

The fields where values are integrated from these worksheets are greyed out. Press [Enter] at any of these fields to open the relevant worksheet. Amounts relating to the earning of this income from Primary and Non-primary Production sources will be displayed in these fields.

A quick access link to the Foreign Income worksheet is provided.

Tax Pre-fill

This schedule can be pre-filled using the Pre-fill Manager. The Pre-fill Manager enables you to download pre-fill reports for clients using the Practitioner Lodgment Service (PLS). You can view these reports in PDF format, and populate the pre-fill information into the client's Tax return. For more information on pre-filling, see Pre-fill Manager.

Warning: Although we ensure best efforts have been made to pre-fill all the Managed Investment Trust detail provided by the ATO, there are some amounts that we cannot pre-fill. We strongly recommend checking the data provided by the ATO and manually entering any missing information.

There is no new worksheet; Tax pre-fill will populate values directly into the fields in the dit.

Tax Pre-fill is dependant on available ATO data. Validate the Tax return by pressing [F3] for a list of the imported values and any errors before lodgment.

Integration to the dit from other worksheets

Integration is provided to the dit worksheet from:

the depreciation worksheet (d), and
the Motor vehicle worksheet (mve).

The fields where values are integrated from these worksheets are greyed out. Press [Enter] at any of these fields to open the relevant worksheet. Amounts relating to the earning of this income from Primary and Non-primary production sources will be displayed in these fields.

Share of Capital Gains

There are three fields for Capital Gains Distributions. These are labelled Indexation, Discount Net and Other.

When amounts are entered in these fields a corresponding entry will be created as a Capital Gains item in the Capital Gains worksheet (g) and will be added to the total of Capital Gains against which current year losses and prior year losses (if any) are deducted. The result will be integrated to the relevant labels at the Capital Gains item in the main return. If, subsequently, an ATO Capital Gains schedule is required, these amounts will be taken into account when accumulating the various amounts to be integrated to that schedule.

Distributions of Capital Losses from sale of units in a Unit Trust

In order that a Capital loss incurred on the sale of Units in a Unit Trust may be entered in the Distributions from partnerships and trusts worksheet (dit) a set of fields cater for this. These fields are situated below the Capital gains fields under the heading Capital gains/Losses on disposal of units in a Unit Trust. They are labelled Loss, Indexation, Discount (Net) and Other.

If there are both Capital losses and Capital gains on disposal of units, these are entered on the same row. There is no Insert row function for these fields.

Where the dit worksheet is attached to a Company return there are only 3 fields available for data entry as the discount method is not applicable for companies.

When you exit the dit worksheet, Tax creates an entry in the Capital gains worksheet (g) with the Category D and the description 'Dit: MIF 1' to indicate the 'Disposal of Units from the dit worksheet'.

Share of Foreign Income and Foreign Tax Paid

There are three sets of fields for foreign income transactions:

Foreign Income
Foreign Tax paid,
Foreign Income type, selected from a drop-down list, and
Deduction relating to earning the foreign income.

When the amounts and the Type of income are entered, a corresponding entry will be created in the Foreign Income worksheet (for) and the total of Assessable foreign income and Net other foreign income will be integrated to the relevant labels in the main return.

The Allowable foreign tax credit will not be calculated until the estimate is prepared. Click [F4] at any time either during data entry or from the Select Return Index (AE), or at the time of printing the return to automatically recalculate the Foreign tax credit and any Excess credit to be carried forward.

Less Other deductions relating to distributions

Enter the deductions relative to earning the distribution income and not the expenses incurred by the distributing Partnership or Trust.

Integration to the dit from other worksheets

Integration is provided to the dit worksheet from:

the depreciation worksheet (d), and
the Motor vehicle worksheet (mve).

The fields where values are integrated from these worksheets are greyed out. Press [Enter] at any of these fields to open the relevant worksheet. Amounts relating to the earning of this income from Primary and Non-primary Production sources will be displayed in these fields.

Fund and SMSF returns only

This worksheet has the Tax code dfp and can be opened at any of the relevant labels in the respective return by clicking [Alt+S] or clicking the Schedule Icon or it can be selected from Preparation > Schedule > Distributions from Partnerships and Trusts (dfp). Due to the different requirements for non-deductible expenses to be reported in the SMSF, there are slightly different views for each of the fund returns (EF and MS).

National Rental Affordability Tax Offset

In the event a Fund receives a distribution of the National Rental Affordability Tax Offset from a partnership, this worksheet now provides a column to receive that amount. The tax offset amount integrates to the holding dialog at Label E3 in the Calculation Statement of the Fund and the SMSF returns.

Share of Primary Production income

This worksheet has no column for share of Primary Production income. If a Partnership does distribute Primary Production income to a Fund or SMSF, that Share of income will be added to any Non-Primary Production income and reported jointly at the Share of Income field.

Deductions field

Additionally, a grid has been provided at the Deductions field and the total deductions amount will integrate from the Distributions from partnerships worksheet (dfp) to the Other deductions worksheet (otd) at:

Item 11 label L in the Fund, and
Item 12 label L1 and L2 in the SMSF.

Share of credits

Any Share of credits will be integrated to the relevant Calculation Statement credit field holding dialogs and then integrated to the label in the return.

Fund and SMSF returns only

This worksheet has the Tax code dft and can be opened at any of the relevant labels in the respective return by clicking [Alt+S] or clicking the Schedule Icon or it can be selected from Preparation > Schedule > Distributions from Trusts (dft).

National Rental Affordability Tax Offset

In the event a Fund receives a distribution of the National Rental Affordability Tax Offset from a trust, this worksheet now provides a column to receive that amount. The tax offset amount integrates to the holding dialog at Label E3 in the Calculation Statement of the Fund and the SMSF returns.

Dividend income

For Fund returns (EF), Dividend income distributed from a Trust must be disclosed at separate labels:

Unfranked at label N,
Franked dividends at label O,
Franking credit attached to the Franked Dividend at label P,
All other Trust income distributed must be declared at Trust distributions - Other amounts at label Q, and
Additionally, such distributions may not be at arm’s length and any such non-arm’s length income must be declared at label U.

Arm’s length and Non-arm’s length deductions

The worksheet contains 2 columns for income and deduction amounts, one for Arm’s length and one for Non-arm’s length.

The Fund return has one label for Net non-arm’s length income and integration will be to item 10 label U.

Deductions not related to Non-arm’s length income will be integrated to item 11 label L Other deductions.

Dissection grids are available at the Deduction fields.

Any Share of credits will be integrated to the relevant Calculation Statement credit field holding dialogs and then integrated to the label in the return.

The SMSF has 3 return labels, U1, U2 and U3 for disclosing Net non-arm’s length income and amounts entered in the dft will integrate to the worksheet Net Non-arm’s length income at Label U and from there to label U2 Net non-arm’s length trust distributions. Other trust income amounts entered in this worksheet will integrate to item 10 label M, Gross trust distributions.

Unfranked and Franked dividends received from a Trust

If the dft is opened for a self-managed fund, the income fields for Unfranked and Franked dividends received from a Trust will be non-active as this return does not separate Dividends received from Trusts.

Integration Points

Integration is provided for:

Deductions from the motor vehicles schedule (mve)
Deductions from Depreciation worksheet
Deductions from Schedule BJ (ATO Interest and dividend deduction schedule) Dividend deductions from the BJ are integrated to D8.

Tax Pre-fill

This schedule can be pre-filled using the Pre-fill Manager. The Pre-fill Manager enables you to download pre-fill reports for clients using the Practitioner Lodgment Service (PLS). You can view these reports in PDF format, and populate the pre-fill information into the client's Tax return. For more information on pre-filling, see Pre-fill Manager.

Tax Pre-fill is dependant on available ATO data. Validate the Tax return by pressing [F3] for a list of the imported values and any errors before lodgment.

If you are not using the new Pre-fill Manager functionality but are downloading the old ATO-Pre-fill from the Tax Agents Portal (TAP), note the following:

Accessing the non-PLS Tax Office Pre-fill Report Data:

INSERTIMAGE Tax Office Pre-filled Report Data Facility

After the Share Account? field in this worksheet, select Utilities > Import from Tax Office Pre-filled Report...

For full information on using the Pre-fill function refer to Pre-filling Tax Return data from Tax Agent’s Portal

Shared income

Tax provides functionality to share such income and any Franking credits or TFN credits attached to it.

The taxpayer's share of the total amounts entered integrates to the Dividend labels in the main return.

Do NOT enter share of Distributions from Cash Management, Property and certain other unit Trusts in this worksheet. This income should be entered at Distributions from Partnerships and Trusts in the relevant return type.

The total amounts transfer to the relevant labels in the income tax return and are rounded on integration. TFN withheld is expressed as a dollar and cents amount in the main return.

All the amount fields accept cents. It is important to remember to key the decimal point, as otherwise the amount entered will be treated as whole dollars.

The franking credit is calculated from the Franked amount entered in the previous field. Once the Franking credit has been calculated by the system, if the Franked amount needs to be changed, then both the Franked amount and the Franking credit fields will need to be cleared, for the new calculation to proceed.

Transactions in the worksheet

To add transactions click [Ctrl+Insert]. To delete transactions click [Ctrl+Del].

For each transaction the following information is recorded:

Company Name: This identifies the Australian entity paying the dividend. To add entries to the worksheet click [Ctrl+Insert].

Unfranked Amount: This is the amount on which Australian company tax has not been paid. It should be detailed on the dividend statement sent by the company or trust paying the dividend. The amounts entered are totalled and transferred on integration to the relevant label in the main return.

Franked Amount: This is the amount of the fully franked dividend received (grossed up to include any franking credits attached to it).

Franking credit: This is the total of franking credits attached to dividends that have been franked at the company tax rate of 30%. An amount equal to the franking credit will be automatically allowed as a tax offset to reduce any tax payable on the dividends and any other taxable income received.

From 1 July 2016 further amendments to the corporate tax rate have been approved:
The aggregated turnover of a company and its known associates and affiliates has been increased from $2 million to $10 million and the tax rate for small business entities reduced from 28.5% to 27.5%.
For companies that are not small business entities, the corporate tax rate remains unchanged at 30%.

As small business companies now have a higher franking credit cap than their tax rate, care needs to be taken not to over-frank by allocating more franking credits than are in the franking account when paying dividends. This could result in your having to pay a franking deficit tax.

The franking credit:

is allowed as a rebate to reduce the amount of tax payable
is limited to gross tax payable before Medicare
must be present for each franked dividend entered but cannot exceed 30% of the franked dividend amount
if an amount of franked dividends is present, then a franking credit must also be present

The Franking Credit calculated from the Franked amount can be overwritten. If the calculated Franking Credit is changed then any further alteration to the Franked Amount will not be reflected in the Franking Credit. Under these circumstances to have Tax recalculate the Franking Credit you should delete both Franked Amount and Franking Credit then enter the Franked Amount as required.

TFN credit: This is the amount of tax withheld where the taxpayer has failed to quote a tax file number (TFN). The amount withheld should be detailed on the Dividend statement received. This amount cannot exceed 48.5% of the Unfranked amount.

Share: Entering Y at this field will open the Index of Joint owners. Details entered and recorded in this Index will be rolled over from year to year. To create the transaction for Share details:

From this Index click New, the Share details screen will be displayed.
In the General tab, Share to: field click [F10] or click on the ellipsis to open the Select Return Index.
Select the return to receive the share.
Enter the percentage share for that return.
Click [F6] to save the entry.
Click Cancel to return to the index.
Click Cancel to return to the index if there are no other returns to share this amount.

Edit or Delete Shared Interest Entries

Refer to Index of Joint Owners.

Joint Owner: Joint owner will only be displayed where Share is Y.

Distribute

When the Distribute button is selected the income and credits will be shared in accordance with the details and percentage entered in the Share details dialog and a corresponding dividend worksheet will be created in the Sharee's return.

Printing the worksheet

When the worksheet is printed, the Host return will show the details of the transaction and the details of the Share return: the Return Code and Name of the taxpayer the dividend income was shared to.

The Sharee's return will show the details of the transaction and the details of the Host return: the Return Code and Name of the taxpayer the dividend income was shared from.

For non-residents select the Withholding Tax rate

Withholding Tax is the amount of tax withheld by financial institutions or companies issuing dividends to non-residents.

If applicable, select the relevant withholding rate. Although the rate can vary from country to country, the tax withheld on dividends is generally calculated at a rate of 30%.

The rate of tax selected is applied to the Unfranked Dividends for estimate calculation purposes only.

Non-residents
If the taxpayer was not an Australian resident for tax purposes for all or part of the year do NOT include income paid or credited during that period unless:

• the dividend was fully franked, or

• the dividend was not fully franked but withholding tax was (or should have been) withheld from the unfranked amount

Deductions

Quick access to Deductions: Type Y at this field and press [Enter] to open the Dividend Deductions (ddd) .

Companies, Funds, Partnerships and Trusts

The Dividends received worksheet provides for the details of one or more dividend received transactions to be recorded.

The taxpayer's share of the total amounts entered integrates to the Dividend labels in the main return.

Do NOT enter share of Distributions from Cash Management, Property and certain other unit Trusts in this worksheet. This income should be entered at Distributions from Partnerships and Trusts in the relevant return type.

The total amounts transfer to the relevant labels in the income tax return and are rounded on integration. TFN withheld is expressed as a dollar and cents amount in the main return.

All the amount fields accept cents. It is important to remember to key the decimal point, as otherwise the amount entered will be treated as whole dollars.

The franking credit is calculated from the Franked amount entered in the previous field. Once the Franking credit has been calculated by the system, if the Franked amount needs to be changed, then both the Franked amount and the Franking credit fields will need to be cleared, in order for the new calculation to proceed.

Information recorded for each transaction:

Company Name: This identifies the Australian entity paying the dividend. To add extra entries to the worksheet, click [Ctrl+Insert].

Unfranked Amount: This is the amount on which Australian company tax has not been paid. It should be detailed on the dividend statement sent by the company or trust paying the dividend. The amounts entered are totalled and transferred on integration to the relevant label in the main return.

Franked Amount: This is the amount of the fully franked dividend received (grossed up to include any franking credits attached to it).

Franking credit: This is the total of franking credits attached to dividends that have been franked at the company tax rate of 30% or, for small business entities, 27.5%. An amount equal to the franking credit will be automatically allowed as a tax offset to reduce any tax payable on the dividends and any other taxable income received.

The franking credit:

is allowed as a rebate to reduce the amount of tax payable
is limited to gross tax payable before Medicare
must be present for each franked dividend entered but cannot exceed 30% of the franked dividend amount
if an amount of franked dividends is present, then a franking credit must also be present

TFN credit: This is the amount of tax withheld where the taxpayer has failed to quote a tax file number (TFN). The amount withheld should be detailed on the Dividend statement received. This amount cannot exceed 48.5% of the Unfranked amount.

Share Account?: Entering Y at this field will open the Index of Joint owners. Details entered and recorded in this Index will be rolled over from year to year. To create the transaction for Share details:

From this Index click New, the Share details screen will be displayed.
In the General tab, Share to: field click [F10] or click on the ellipsis to open the Select Return Index.
Select the return to receive the share.
Enter the percentage share for that return.
Click [F6] to save the entry.
Click Cancel to return to the index if there are no other returns to share this interest amount.

Joint Owner: Joint owner will only be displayed where Share account? is Y.

Distribute

When the Distribute button is selected the income and credits will be shared in accordance with the details and percentage entered in the Share details dialog and a corresponding dividend worksheet will be created in the Sharee's return.

Printing the worksheet

When the worksheet is printed, the Host return will show the details of the transaction and the details of the Share return: the Return Code and Name of the taxpayer the interest was shared to.

The Sharee's return will show the details of the transaction and the details of the Host return: the Return Code and Name of the taxpayer the interest was shared from.

For non-residents select the Withholding Tax rate

Withholding Tax is the amount of tax withheld by financial institutions or companies issuing dividends to non-residents.

If applicable, select the relevant withholding rate. Although the rate can vary from country to country, the tax withheld on dividends is generally calculated at a rate of 30%.

The rate of tax selected is applied to the Unfranked Dividends for estimate calculation purposes only.

Non-residents – If the taxpayer was not an Australian resident for tax purposes for all or part of the year do NOT include income paid or credited during that period unless:
• the dividend was fully franked, or
• the dividend was not fully franked but withholding tax was (or should have been) withheld from the unfranked amount

Dividend Deductions

For Partnerships and Trust the total deduction entered in to this worksheet integrates to the Deductions relating to Australian Investment Income item in the main return. To add extra lines for deductions click [Ctrl+Insert].

For Companies and Funds deductions are not entered in this worksheet as the breakdown into Australia-type and Overseas-type amounts is required.

Back to Supporting schedules and worksheets

Index of Returns Sharing Dividend Income

Joint Tax file No: By providing this detail the identity of another return that is to receive a share of the income is recorded.

Joint share: This percentage is used to calculate the Share TFN credit and Share dividend.

Share TFN credit: This amount is calculated using the percentage entered at Joint share.

Share dividend: This amount is calculated using the percentage entered at Joint share.

Trust

The holding dialog at Item 51 has been introduced to collect any amount of Exploration credits received from a Partnership or another Trust; and to enter any amount of Exploration credits received by the Trust due to the Trust's investment in an eligible Mining Exploration company.

To be eligible to claim the offset for these credits, the Trust must have been resident for the whole of the income year.

Special rules apply to a beneficiary who receives exploration credits from a trust. For more information, see What to do when you receive exploration credits on the ATO website.

INSERTIMAGE

Integration from MYOB Tax worksheets to this worksheet are:

Amounts received as a distribution from a Partnership at item 8 (dip)
Amounts received as a distribution from another Trust at item 8 (dit)
Credits received from a Greenfields mining company in lieu of a franking credit).

Note that the ATO has not provided labels at the Distributions received item 8, but has provide distribution labels in the Distribution Statement.

Once entered, the sum of the credits is passed to the Distribution statement, Item 55 label M for distribution to beneficiaries presently entitled. Where there is no presently entitled beneficiary, the amount is integrated to label X Other refundable offsets, Income to which no beneficiary is presently entitled.

CCH References

19-000 - Mining, Infrastructure and environmental protection

Partnership

The holding dialog at Item 51 has been introduced to collect any amount of Exploration credits received by the Partnership from another Partnership or a Trust; and to enter any amount of Exploration credits received by the Partnership due to the partnership's investment in an eligible Mining Exploration company.

Where a partnership is issued with exploration credits in an income year it may pass the exploration credits to its members. To be entitled to benefit from exploration credits, the member must be an Australian resident for the whole of the income year.

For more information, see What to do when you receive exploration credits on the ATO website.

INSERTIMAGE

Integration from MYOB Tax worksheets to this worksheet are:

Amounts received as a distribution from a Partnership at item 8 (dip)
Amounts received as a distribution from another Trust at item 8 (dit)
Credits received from a Greenfields mining company in lieu of a franking credit (open field).

Note that the ATO has not provided labels at the Distributions received item 8, but has provided a distribution label in the Distribution Statement.

Once entered, the sum of the credits is passed to the Distribution statement, Item 51 label M for distribution to the partners.

CCH References

19-000 - Mining, Infrastructure and environmental protection

Back to Supporting schedules and worksheets

Emergency Payment schedule (eps)

In accordance with ATO instructions, where Emergency Payments are contained in the Pre-fill Report accessed from Item 5, they will be pre-filled to this new worksheet which integrates to a non-editable field at Item 24 and is totalled to Label V.

Back to Supporting schedules and worksheets

Employee Share Schemes worksheet (emp)

This item is about discounts on employee share scheme interests (ESS interests) that you or your associate received under an employee share scheme.

ESS interests are:

shares
stapled securities (provided at least one of the stapled interests is a share in a company)
rights to acquire shares and stapled securities.

An ESS interest acquired by your associate as regards your employment is treated as though the ESS interest was acquired by you.

The discount is the difference between the market value of the ESS interests and the amount paid to acquire them.

The ESS interests can:

be from an Australian company or a foreign company
relate to your employment inside or outside Australia
relate to a work relationship other than employment, for example sub-contracting.

Changes to employee share schemes took effect on 1 July 2015 and apply to ESS interests acquired on or after that date.

For essential information for Tax Agents on Employee Share Schemes home page click this link to the ATO website.

In calculating the income test amount, any reduction to the assessable discount amount due to the $1,000 exemption is to be ignored - that is, the discount amount up to $1,000 should be included in the amount entered at label D. Therefore, you must enter the FULL value of these discounts at label D.

Access to the existing tax exemption of up to $1,000 will be restricted to taxpayers with an adjusted taxable income* (income test amount) no more than $180,000.

INSERTIMAGE

For the income test to be satisfied, the sum of the following amounts must not exceed $180,000:

Taxable income (not including the $1,000 reduction)
Reportable employer superannuation contributions
Total reportable fringe benefits amounts
Net financial investment loss
Net rental property loss
Deductible personal superannuation contributions.

If the taxpayer has a taxable loss, this is to be treated as zero for the purposes of calculating the income test amount.

It is important therefore that where your client is in an Employee Share Scheme you check and complete all the items that fill the Income Test item fields at IT1 to IT6.

If the taxpayer satisfies the income test ($180,000) the reduced amount will be included at label B.

The calculation of the Total assessable discount amount label B is automated by Tax with the income test being performed at the same time.

Therefore, the details shown in the worksheet example above, where the taxpayer has Adjusted taxable income exceeding $180,000, the income test is applied during integration and if it is met, the $1,000 discount is not allowed.

Taxed upfront employee share schemes

Generally, the difference between the market value of an ESS interest and what an employee pays for the interest is taxed upfront.

The $1,000 tax concession remains available if an employee and the scheme meet certain conditions and the employee's taxable income (after adjustments) is $180,000 or less.

Deferral employee share scheme

Employees who acquire ESS interests under a deferral scheme are assessed in the income year when the deferred taxing point arises.

Employer reporting requirements and withholding tax

Employers must provide a statement to the ATO and their employees detailing the employee share scheme interests they have issued.

Withholding tax applies to discounted ESS interests provided to an employee on or after 1 July 2009 where that employee has not quoted their TFN or ABN to their employer by the end of the relevant income year.

Employees who have previously provided a tax file number (TFN) declaration to their employer with their TFN will not have to provide a new declaration.

Taxpayers who complete label A (Foreign source discounts) are not assessed separately on amounts declared at this label. Label A is simply an extraction of amounts declared at labels D, E, F and G and should only be completed by taxpayers claiming the FITO at item 20.

Tax Pre-fill

This schedule can be pre-filled using the Pre-fill Manager. The Pre-fill Manager enables you to download pre-fill reports for clients using the Practitioner Lodgment Service (PLS). You can view these reports in PDF format, and populate the pre-fill information into the client's Tax return. For more information on pre-filling, see Pre-fill Manager.

Tax Pre-fill is dependant on available ATO data. Validate the Tax return by pressing [F3] for a list of the imported values and any errors before lodgment.

Foreign Income worksheet

This button opens the transactional dialog. Each foreign transaction should be entered separately.

Multiple Foreign Transactions

This dialog box contains tabs for Other foreign income and Trans-Tasman transactions, and a Summary tab.

These are transactional dialogs used when there is more than one entry of the same type to be made.

The Other Foreign Income transactions amounts are totalled and declared as income and where foreign income tax has been paid on any transaction, those transactions are used in the calculation of the foreign income tax offset.

Where the taxpayer has a foreign Capital gain which must be disclosed at Item 18, for the calculation of the foreign income tax offset (FITO) to be correct, a special field has been provided at the capital gains item to enter the amount of the foreign capital gain.

Important Note on foreign capital gains:

If any tax has been paid on the amount of foreign gain you have entered in this special calculation only field at the capital gains item, you must create am entry in the foreign income worksheet to record the amount of tax paid (if any) on this Capital gain. Failure to do this will result in an incorrect calculation and the offset.

The Trans-Tasman provides for the calculation of Australian franking credits from a New Zealand company.

Unlike Tax, all Foreign income is entered in this dialog – Foreign Salary and Wages, Foreign Pensions, Attributable foreign income and all other Foreign source income.

Other Foreign transactions

Information recorded for each foreign income transaction:

Description: Enter a brief description of the transaction

Type of Income: This is required for integration purposes as entries in the foreign income dialog can be generated from other items in the return. For example, the Distributions dialog which allows foreign income transactions to be entered at the same time as the other income and credits received from the MIF.

Foreign Country Code: Click [F10] for the available foreign currency codes. Select the method of conversion and the Australian Dollar amount will be calculated.

Exchange Rate Method: Select from the Exchange rate method to be used: Actual, Average or Year End.

Foreign Currency: Enter the amount in the foreign currency for the transaction grossed up by the foreign tax paid. For example, an income amount of USD$2000 on which foreign tax of USD200 has been paid is entered as 2200. Do not include any amounts of Exempt Foreign Employment Income or Foreign Capital Gains as transactions. Enter Exempt foreign employment income in the front entry screen. and create a transaction for any foreign tax paid on a Foreign Capital Gain included in Net Capital Gains.

Exchange Rate: If you have selected a foreign currency, the relevant exchange rate will pre-fill this field. Otherwise enter the exchange rate for the currency to Australian dollars (AUD) for the particular foreign currency. The amount entered will be calculated and displayed in the Australian $ field.

Reasonably Related Deductions: From the total deduction for the transaction enter in this field the amount that can be said to be reasonably related to the income. This breakdown is required for the correct calculation of the FITO limit (the cap).

Whether a deduction reasonably relates to the disregarded amounts will be a question of fact depending on the circumstances of the taxpayer. Expenses that relate exclusively to the disregarded income amounts will be ignored in calculating the second element of the cap calculation. Deductions that relate to both the disregarded income amounts and other assessable income will need to be apportioned on a reasonable basis between the different income amounts. Refer to Schedule 1, item 1, subparagraph 770-75(4)(b)(ii) of the ITAA 1997.

Allowable deductions for items such as debt deductions (these should be entered at D15 for the individual return and the relevant item expense label in the other form types), gifts, contributions, superannuation and tax agent's fees (these should be entered at the relevant expense item in the relevant return) are not considered to be reasonably related amounts.

Net amount: This is the result of the Income amount less the Reasonably related deduction amounts, and is calculated by the system

Eligible Foreign Tax Paid: Only that amount of the foreign tax paid that relates to eligible foreign income should be entered at this field.

The system does not calculate the Foreign income tax offset at this point but does so only when you click [F4] after saving and exiting the worksheet. The FITO cap can only be calculated when all the income and deductions for the return have been processed. Therefore the user controls at what stage the return is complete and the estimate is to be prepared. Each time you change the Taxable Income or loss in the return, you will need to press [F4] so that the FITO cap and the offset can be recalculated using the revised figures.

How to access Exchange rates:

From Tax click the Maintenance > Tax Rates > Exchange rates.
Highlight an entry and click Properties to change the rate details.

Details recorded for each exchange rate

Year: Select the calendar year relevant to the rate.

End Date: Select either the 6 months ending June or the 6 months ending December.

Average: Type the average rate of exchange that applied over the 6 month period to four decimal places.

Year-end: Type the rate of exchange that applied at the end of the 6 month period to four decimal places.

When the Tax programs are released for each income year, the Foreign Exchange Rates are not included as the annual rates as at 30 June have not been published. Until such time as they are published and can be included in the software, you will need to key the relevant rate.

The ATO usually publishes these Rates towards the end of July of each income year and therefore they are included in the first Service Pack issued after the major release.

Back to Foreign income worksheet (for)

Foreign Rental Property Worksheet (ref)

Although the foreign rental worksheet is a separate worksheet, for calculation purposes only, it is controlled by the foreign income worksheet (for). Therefore when you want to open it, click label R in the Individual Return at item 20 as shown below:

INSERTIMAGE

Alternatively, you can select it from the Preparation > Worksheet > Foreign income rental worksheet, or from the relevant Navigation pane.

This worksheet is NOT one that is lodged via ELS and applies only to the Individual Return and the net rent may only be shared with another Individual return.

The worksheet offers foreign currency conversion functionality and further allows for the income to be grossed up by any foreign tax paid and to be pro-rated over the number of days the taxpayer was a temporary resident of Australia.

In all other regards it is the same as the standard ATO Rental Schedule. The following screen shots show only those areas of the schedule that differ from the ATO rental schedule.

The first shows the different fields for a foreign address and the Exchange Rate Conversion fields.

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Fields are provided to determine the number of days residency/temporary residency.

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Where the dates are not the complete year, then temporary residency will be presumed and the amount available for distribution to the main return label and the sharee’s return (if any) will be recalculated on that number of days and the result will be defaulted to the ‘Share with’ fields at the time of sharing.

A summary of the amounts is shown at the foot of the schedule.

These values are passed to the Foreign Income worksheet so that the Foreign Income Tax Offset (FITO) can be correctly calculated.

Back to Supporting schedules and worksheets

CCH References

21-032 - Temporary Residents

22-125 - Concessions for Temporary Residents

Forestry managed investment scheme worksheet (fms)

Refer to Forestry Managed Investment Schemes on the ATO website.

The Forestry managed investment scheme worksheet is provided as a guide to the Income and deductions applicable to this scheme.

Income entered will integrate to the income item in the relevant return and the deductions to the relevant deduction label in each of the returns.

Forms Affected: I, C, F, MS, P and T

The ATO has introduced these items to collect the amount of income and expenses to be included in taxable income for initial and subsequent participants in a Forestry MIS. Income and expenses are disclosed at the following labels in the various income tax returns:

Return Type	Income labels	Deduction labels
Individual	Items 23	Item D14, label F
Company	Item 6, label X	Item 7, label U
Fund	Section B: item 11, label X	Section C: item 11, label U
SMSF	Section B: item 10, label X	Section C: item 12, labels U1 and U2
Partnership and Trust	Item 10, label Q	Item 17, label D

Income from Forestry Managed Investment Schemes (MIS) arises from the following activities:

sale and harvest receipts for initial participants, and
thinning receipts for initial and subsequent participants

A dissection grid is available at each of the income and deduction fields and can be opened by clicking the label at the relevant field.

Capital Gains event

As a Capital Gains event occurs when a Forestry MIS interest is sold, a new label has been introduced at the Capital Gains in each of the returns to advise whether the Net capital gains amount at Label A includes an amount that relates to a CGT event from a Forestry Managed Investment Scheme Interest (MIS) other than as an ‘initial participant’.

Due to this a new category of asset has been introduced into the Capital gains worksheet (g) with the code F and when this code is selected, Tax will integrate the answer to the main return and also calculate the various categories of gains and losses to populate the ATO Capital Gains Schedule (BW)

Back to Supporting schedules and worksheets

Generic Schedule / Worksheet

For amount items in an income tax return, for which there is no specific schedule, a generic schedule is available. The generic schedule/worksheet has dissection and math functions.

Once a generic schedule/worksheet is attached to a field, the field will be greyed out. At the greyed out field press [Enter] to open the schedule or worksheet behind it.

Description

Initially the heading applied to the generic schedule is derived from the description of the item/label in the main return from which the generic schedule is being accessed and the field identifier (for example, E285, E286 and so on). The title or description of each generic schedule may be customised to your requirements.

For example, default generic schedules attached to a Company Return may have the description:

Superannuation business income - virtual PST (Field E285)

Superannuation business income - net cap. gain-super class (Field E286)

Deletion

To delete a generic schedule:

Select Preparation > Delete Schedules.
Locate the worksheet according the title on the worksheet which will be the default as described above or as you have typed it.
Highlight one or more entries in the list of schedules and select Delete.
When prompted, confirm the deletion as required: Yes; No; or, Yes to All.

Details

There are two data entry sections:

The first provides 8 lines for Details and amounts where a simple totalling of is required. When you press [Enter] after completing the amount an additional line is created.
The second section provides 2 lines for Qualified Amounts where proportions and multiples need to be entered. Click [Ctrl+Insert] to add extra lines.

Numeric Values: Negative values are permitted at all relevant fields in the Generic schedule, for example, to allow Half Share to Partner/Spouse to be recorded.

Negative total amounts integrate to the return as zero.

Printing

Generic schedules print when a return is printed with Tax worksheets with it without the ATO schedules option ticked.

Generic schedules may also be printed individually using Reports > Print Schedules.

Zero amounts do not print. All inserted lines (except for trailing empty lines) print. If the inserted lines are empty these will print as gaps in the text.
To delete excess lines, [Ctrl+Delete]

Integration

If a negative amount is entered at a return label where it is not permitted, integration will clear the negative value and integrate a zero.

If the worksheet is attached to a whole dollar field on the form, and the total of the worksheet is not a whole dollar, natural rounding is used; that is, any remainder below 0.50 is rounded down, otherwise the amount is rounded up. To force rounding contrary to this, add a line to the worksheet indicating 'Rounding adjustment' with an amount of +0.49 or -0.49 as applicable.

Once a generic worksheet is attached to a field on a form, that field becomes disabled and cannot be edited directly.

Copying

For AE and Series 6 & 8, generic worksheets may be copied only to returns of the same type. Refer to Copy a Schedule [F5]

Restrictions

Generic schedules may only be attached to numeric fields on return forms. This excludes fields on inserted lines and fields where a purpose built schedule, such as the rental schedule, is available.

Tax Pre-fill

This schedule can be pre-filled using the Pre-fill Manager. The Pre-fill Manager enables you to download pre-fill reports for clients using the Practitioner Lodgment Service (PLS). You can view these reports in PDF format, and populate the pre-fill information into the client's Tax return. For more information on pre-filling, see Pre-fill Manager.

Tax Pre-fill is dependant on available ATO data. Validate the Tax return by pressing [F3] for a list of the imported values and any errors before lodgment.

Back to Supporting schedules and worksheets

Income Tests

The Individual Return (EI) Income tests tab provides worksheets at the following labels:

(The values for IT1 and IT2 are defaulted from the amounts entered at Item 1 Salary or wages.)

Label U: Tax-free Government pensions worksheet (IT3) (tgp)

Label V: IT4 Target Foreign Income worksheet (tfi)

Label X: IT5 Financial investment income and deductions (fil)

Label Y: IT6 Net Rental income and deductions (rpl)

For the Partnership Return (EP) this worksheet is provided at:

label G: Financial Investment income and deductions 2017 (fip)

Label H: Rental income or loss Holding Dialog

Adjusted taxable income (ATI)

ATI is the sum of:

Taxable income
Adjusted fringe benefits total (item IT1 label W * 0.510)
Reportable employer superannuation contributions (item IT2 label T)
Deductible personal superannuation contributions (item D12 label H)
Tax-free government pensions or benefits (item IT3 label U)
Target foreign income: item IT4 label V - includes any income earned from overseas that is not already included in your taxable income (for example, exempt from income) or received in the form of a fringe benefit.
Total net investment loss (includes both reportable employer super contributions and deductible personal super contributions - items IT5 label X and IT6 label Y)

Less:

Child support you paid (item IT7 label Z)

Some of the income tests have a slightly different formula and only include some of the ATI components set out above.

The spouse's (or any other dependant’s) ATI is calculated in the same manner.

For the spouse, the labels are found at item SD:

Reportable fringe benefits (label S) if this amount is greater than $3,921 it is adjusted upwards by 0.510.
Reportable superannuation contributions (label A which is the sum of IT2 plus D12 in the spouse's return).
Tax free government pensions paid under the Military Rehabilitation and Compensation Act 2004 that have not been included at label Q - Exempt pensions (label B).
Target foreign income (label C).
Total net investment loss (this is the sum of Net financial investment loss and Net rental loss) (label D).
Child support your spouse paid (label E).

Rebate income

Rebate income is used in the eligibility testing for SAPTO. If you're a Senior Australian, you may be eligible for the seniors and pensioners tax offset (SAPTO).

The SAPTO can reduce the amount of tax you are liable to pay. In some cases, it may reduce your tax liability to zero and you may not have to lodge a tax return.

To be eligible for this tax offset, you have to meet certain conditions relating to your income and eligibility for an Australian Government pension or allowance.

If you're a senior, you must meet the age requirement for the Age pension. This includes if you qualified for the Age pension, but did not receive it.

Depending on your rebate income, you may receive a full, partial or nil offset amount.

If you have a spouse, you will be tested on your combined rebate income for the SAPTO eligibility. The amount of the tax offset is based on your individual rebate income.

In some cases, if you are both eligible for SAPTO, you may be able to transfer your spouse's unused offset to you. We calculate their transfer amount and include this amount when calculating your SAPTO.

Rebate income

MYOB Tax works out 'rebate income' to determine whether you are eligible for the seniors and pensioners tax offset.

Your rebate income includes your:

Taxable income (your assessable income minus deductions).
Adjusted fringe benefits amount (total reportable fringe benefits amounts x 0.51).
Total net investment loss (includes both net financial investment loss and net rental property loss).
Reportable super contributions (includes both reportable employer super contributions and deductible personal super contributions).

Income for surcharge purposes

Medicare Levy Surcharge and Private Health Insurance income tests

To assess your private health insurance (PHI) rebate entitlement, generally your income for surcharge purposes is your:

Taxable income (your assessable income minus deductions).
Reportable fringe benefits amount, as reported on your payment summary.
Total net investment loss (includes both net financial investment loss and net rental property loss).
Reportable super contributions (includes both reportable employer super contributions and deductible personal super contributions).
The amount on which family trust distribution tax has been paid.

You may have to pay Medicare levy surcharge (MLS) if you or your dependants (including your spouse, even if they had their own income) did not have an appropriate level of private patient hospital cover for the whole financial year and your income was above a certain amount.

HECS/TSL/SSL/SFSS repayment income

HELP and SFSS repayment income

For income testing purposes, your repayment income includes your:

Taxable income (your assessable income minus deductions).
Reportable fringe benefits amount, as reported on your payment summary.
Total net investment loss (includes both net financial investment loss and net rental property loss).
Reportable super contributions (includes both reportable employer super contributions and deductible personal super contributions) any exempt foreign employment income amounts included in a tax return.

For calculation of the repayment debt your taxable income is increased by any Reportable Fringe Benefits plus any Reportable Superannuation contributions and the percentage applied is based on the thresholds for the relevant income year. For example, for a taxpayer for taxable income of $119,117 the percentage would be 8% of the adjusted income for HELP Assessment Debt purposes:

HELP Assessment Debt 8.00% of Adjusted income of $119,117:

= 113,349 Taxable Income
+ 3,768 Reportable Fringe Benefits
+ 2,000 Reportable Superannuation contributions

Invalid spouse or invalid carer offset

To be eligible for the Invalid spouse or invalid carer offset:

Your adjusted taxable income (ATI) (including your invalidity and carer payments) must be less than $100,001, or
If you maintained your spouse for the whole year their ATI (including any invalidity or carer payments) for 2015–16 must be less than $10,634.

An invalid can be your:

Spouse.
Parent.
Child, aged 16 years old or older.
Brother or sister, aged 16 years old or older.
Spouse’s parent.
Spouse’s child, aged 16 years old or older, or
Spouse’s brother or sister, aged 16 years old or older.

That person must be receiving:

A disability support pension under the Social Security Act 1991,
A special needs disability support pension under the Social Security Act 1991, or
An invalidity service pension under the Veterans’ Entitlement Act 1986.

Invalid spouse or invalid carer offset

An invalid carer someone who is caring for your or your spouse’s invalid child aged 16 years or older, or your or your spouse’s invalid brother or sister aged 16 years old or older. An invalid carer is your:

Spouse
Parent
Spouse’s parent.

The invalid carer must be:

Receiving a carer allowance or carer payment under the Social Security Act 1991 in relation to caring for that person, or
Wholly engaged in providing care to that person and the person being cared for receives:
A disability support pension under the Social Security Act 1991
A special needs disability support pension under the Social Security Act 1991, or
An invalidity service pension under the Veterans’ Entitlement Act 1986.

Partnership return form RIT measure

Under the RIT measure, the partners are required to include their total net investment loss (which is the sum of financial investment losses and rental property losses) distributed from the partnership at:

Item 50 label G - Net financial investment income or loss.
Item 50 label H - Net rental property income or loss.

The Partnership distribution statement includes reciprocal labels:

Label J - Share of net financial investment income or loss.
Label K - Share of net rental property income or loss.

The amounts distributed to item 13 of the partner’s individual return subsequently find their way into the Income Test items IT5 and IT6.

Tax Pre-fill

This schedule can be pre-filled using the Pre-fill Manager. The Pre-fill Manager enables you to download pre-fill reports for clients using the Practitioner Lodgment Service (PLS). You can view these reports in PDF format, and populate the pre-fill information into the client's Tax return. For more information on pre-filling, see Pre-fill Manager.

Tax Pre-fill is dependant on available ATO data. Validate the Tax return by pressing [F3] for a list of the imported values and any errors before lodgment.

Back to Income Tests

Tax-free Government pensions worksheet (IT3) (tgp)

The income entered in this worksheet is used in calculating the taxpayers Adjusted Taxable Income (ATI) for dependency offset eligibility.

Tax-free government pensions are pensions which you do not need to pay tax on. However, they are taken into account when calculating your adjusted taxable income for eligibility to certain tax offsets.

In order that pre-filling of the spouse details labels in the taxpayer's return may be completed correctly and no overstating of the spouse's ATI occur the worksheet is in two sections.

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The first section is for tax-free Government pensions under Sub-division 52-A Subdivision 52-A (Social Security Act 1991 pensions) or 52-B (Veterans' Entitlements Act 1986 pensions). These are the payments that if they were no tax-free would be entered at item 6 Australian government pensions and allowances. These pensions although exempt are used in the calculation of the transfer of the unused portion of the pension offset to spouse.

The second section is for tax-free pensions paid under Sub-division 52-CA (Military Rehabilitation and Compensation Act 2004). Some of these are:

a Special Rate Disability Pension under Part 6 of Chapter 4 of the Military Rehabilitation and Compensation Act 2004;
a payment of compensation under section 68, 71 or 75 of the Military Rehabilitation and Compensation Act 2004;
a payment of compensation mentioned in paragraph 234(1)(b) of the Military Rehabilitation and Compensation Act 2004.

For essential information about IT3 click this link to the ATO website.

Alternatively, a list of Tax free government pensions can be found in the Individual tax return instructions on the ATO website Exempt income as well as those detailed from the Military Rehabilitation and Compensation Act 2004:

To insert additional sets of fields, click [Ctrl+Ins].

Tax Pre-fill

This schedule can be pre-filled using the Pre-fill Manager. The Pre-fill Manager enables you to download pre-fill reports for clients using the Practitioner Lodgment Service (PLS). You can view these reports in PDF format, and populate the pre-fill information into the client's Tax return. For more information on pre-filling, see Pre-fill Manager.

Tax Pre-fill is dependant on available ATO data. Validate the Tax return by pressing [F3] for a list of the imported values and any errors before lodgment.

Financial Investments

Financial investments for income test purposes include the following:

shares
managed investment schemes
forestry managed investment schemes
a right or option in respect of any of the above
an investment of a like nature to those listed above

You do not include interest from savings accounts or capital gains or capital losses when calculating net financial investment income or loss.

Shares

Include any dividend income from Australian and foreign companies including unlisted and listed companies.

You must include deductions for the expenses incurred for earning your Australian and foreign dividend income.

You must also include the dividend income and deductions when calculating the partnership's net financial investment income or loss.

Managed investment schemes

Managed investment schemes are those schemes registered under the Corporations Act 2001 and include:

cash management trusts
property trusts
Australian equity (share) trusts
agricultural schemes (e.g. horticulture, aquaculture, commercial horse breeding)
international equity trusts
film schemes
timeshare schemes
mortgage schemes
actively managed strata title schemes.

The investment manager will be able to tell you if your investment is a managed investment scheme.

What types of investments are NOT managed investments schemes?

Some examples of investments that are not managed investments schemes include:

regulated super funds
approved deposit funds
debentures issued by a body corporate
barter schemes
franchises
direct purchases of shares or other equities
schemes operated by an Australian bank in the ordinary course of banking business (e.g. term deposit).

If the partnership received income from a managed investment scheme you need to show that income at R item 8.

Forestry managed investment schemes

A managed investment scheme is a forestry managed investment scheme if the purpose of the scheme is for establishing and tending trees for felling in Australia.

If you have income from a forestry managed investment scheme you need to show that income at item 10. You can claim deductions for payments to a forestry managed investment scheme at item 17. Use the information you show at items 10 and 17 to calculate the net financial investment income or loss. Do not include capital gains or losses in the net financial investment income or loss.

Right or option

You also include in your net financial investment income or loss any income and deductions from rights or options you hold in shares, managed investment schemes or forestry managed investment schemes. Examples of rights or options include:

warrants
future contracts
options
a right in an employee share scheme.

Capital gains and losses

Your net financial investment income or loss does not include any capital gains or capital losses from any financial investments.

Deductions

Allowable deductions you can claim for an investment include, but are not limited to, expenses you pay to:

borrow money to purchase an investment
manage your investments
obtain advice about your investments.

You only include the expenses attributable to the financial investments. If all of your expenses attributable to financial investments exceeds the gross income from those investments you have a loss. If your income from financial investments is greater than your expenses attributable to financial investments you do not have a loss.

Statement of distribution

Once you have shown your net financial investment income or loss at item 50, you also need to show each partners share of the financial investment income or loss at item 51.

Example - Net financial investment income or loss

The XYZ partnership has a share portfolio. The partnership's total dividend income for the financial year is $7,000 from Australian shares, all of which are unfranked (shown at item 12). The partnership claimed interest expenses of $10,000 (shown at item 16) on the money borrowed to purchase the Australian shares.

During the financial year, XYZ also received income from a cash management trust (managed investment scheme), forestry managed investment scheme and dividends from foreign shares. XYZ completed the partnership tax return questions as follows:

Label R item 8 $400 from non-primary production distribution from cash management trust (managed investment scheme)
Label Q item 10, $1,200 from forestry managed investment scheme income
Label B item 23, $1,230 from gross dividend income from foreign shares.

For this example, only the income for the financial investments has been used. In many cases the financial investment income may only be part of the income shown at certain items. For example, the amount shown at question 23 may be $300; however, only $123 is income from foreign dividends.

XYZ incurred expenses against the financial investment income and showed deductions at the following items:

Label T item 8, $2,500 for expenses relating to the cash management trust
Label P item 16, $4,300 for interest on money borrowed to purchase Australian shares
Label D item 17, $2,600 for forestry managed investment scheme deductions
Label V item 23, a loss of $1,770 as the interest expense on money borrowed to purchase the foreign shares was $3,000.

In addition to the above, XYZ received $300 as a share of net financial investment income from the ABC partnership. The $300 was shown at J item 50 on the statement of distribution for the ABC partnership tax return.

XYZ's net financial investment income or loss is the difference between the financial investment income and deductions plus the net financial investment income from the ABC partnership.

Using the Net financial investment income or loss worksheet (fip), the relevant values will default to the worksheet from the labels in the main return.

Tax Pre-fill

This schedule can be pre-filled using the Pre-fill Manager. The Pre-fill Manager enables you to download pre-fill reports for clients using the Practitioner Lodgment Service (PLS). You can view these reports in PDF format, and populate the pre-fill information into the client's Tax return. For more information on pre-filling, see Pre-fill Manager.

Tax Pre-fill is dependant on available ATO data. Validate the Tax return by pressing [F3] for a list of the imported values and any errors before lodgment.

Completing the Early stage venture capital limited partnership worksheet (esv)

Use the MYOB Tax Early stage venture capital limited partnership tax offset worksheet (esv) to record and store the details of these transactions and calculate the amount claimed and any excess not claimed in the financial year and carry it forward to be used in a future year.

Note that the front entry screen can be slightly different, depending on which return type the worksheet is being prepared for.

Company return

Fund and the self-managed Fund

Individual return

Trust return

Partnership return

Company return

Early stage venture capital limited partnership tax offset (esv)

Completing the worksheet

Go to item 22, and click label L to open the front entry screen.
The Eligibility question is mandatory. Selecting the Question checkbox enables the Worksheet button.

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Click the Worksheet button and enter the details.

INSERTIMAGE Early_stage_venture_capital_limited_partnership_(ESVCLP).png

Press [F6] or click OK to save the transaction.

The transaction is moved to the stored area of the worksheet and the total running total shown at the bottom of the worksheet.

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Add any additional purchase transactions in one or more ESVCLP.

If you buy shares in the same Venture capital company at a different date, you must create a separate entry. Do not add a new acquisition to an existing one as there are capital gains implications on disposal.

If there are no further transactions, click Close and OK, or press [F6] at the front entry screen to close the worksheet. Integration of the offset amount will be to the relevant label, in this case label L.

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After F4 Estimate

Following the [F4] estimate Preview or Print, if you open the worksheet front entry screen you will see that the amount of the offset given has been included.

There is an excess to carry forward which is (50,000 - 19,452). This is not shown but will be calculated during RSD from 2017 to 2018.

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CCH References

20-700 Outline of innovation incentives

Return to Completing the Early stage venture capital limited partnership worksheet (esv)

Fund and the self-managed Fund

Early stage venture capital limited partnership tax offset (esv)

Completing the worksheet

Go to the calculation statement and click label D1 to open the front entry screen.

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The Eligibility question is mandatory. Selecting the Question checkbox enables the Worksheet button.

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Enter the details and press [Enter]. The transaction will be moved to the storage area as this is a multiple transaction worksheet.

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If there are other transactions, enter those details. Do not aggregate the transactions, each must be shown separately with its date as there are capital gains implications at a later stage.
If there are no further transactions, click Close and then press [F6], or click OK to save the entry and for integration to D1 to occur.

INSERTIMAGE FSMF_Early_stage_venture_capital_limited_partnership_(ESVCLP)_integration.png

After [F4] Estimate

Following the [F4] estimate Preview or Print, if you open the worksheet front entry screen you will see that the amount of the offset given has been included and there is no excess to be carried forward.

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Return to Completing the Early stage venture capital limited partnership worksheet (esv)

Individual return

Early stage venture capital limited partnership tax offset (esv)

Completing the worksheet

This example demonstrates when the taxpayer receives a share of ESVCLP from a Partnership or from a Trust.

Go to at item T8 and click label K to open the front entry screen.
The offset is entered in the distributions from Partnerships (dip) or the Distributions from trusts worksheet (dit) and MYOB Tax creates an entry in the worksheet with the code D.

INSERTIMAGE Ind_Early_stage_venture_capital_limited_partnership_(ESVCLP).png

If you have also invested in a venture capital company, to claim that offset you must enter the details of the transaction in the fields provided. This worksheet provides for multiple transactions.
Save each entry. When finished, click Close, and then click OK or press [F6] at the front entry screen to integrate the sum of these entries to label K.

After [F4] Estimate

Following the [F4] estimate Preview or Print, if you open the worksheet front entry screen you will see that the amount of the offset given has been included and the excess to be carried forward advised on the estimate. The estimate shows that of the $3,939 ESVCLP tax offset claimed, $614.88 was used and an ESVCLP tax offset excess to carry forward of $3,324.12 calculated which will be rolled forward during the 2017-18 RSD program.

This is shown below the line in the Taxation estimate and at the bottom of the Detailed estimate.

Extract from Estimate:

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Full estimate:

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CCH References

20-700 Outline of innovation incentives

Return to Completing the Early stage venture capital limited partnership worksheet (esv)

Trust return

Early stage venture capital limited partnership tax offset (esv)

Completing the worksheet

Completing the worksheets and distributing the offsets from the trust return is complex, because:

the offset is claimed at item 52 label H, and
distributed or becomes an offset to which no beneficiary is presently entitled at item 55.

The worksheets for these offsets are accessed and completed at item 52 in the special MYOB fields provided to the left of Label H. To accommodate for the ATO’s design, MYOB has had to improvise to deal with the calculation and distribution of two separate offsets. Note that these fields are not ELS/PLS fields and that only Label H will be transmitted to the ATO when lodged electronically. These fields do not appear on the ATO's pre-printed form.

Go to item 52, and press [Enter] at the special MYOB ESVCLP field.

Do NOT click label H as there is a Generic schedule behind that label, which will be removed in the first Service Pack.

The Eligibility question is mandatory. Checking the Question checkbox enables the Worksheet button.

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Click Close and then save the front entry screen by clicking the Save icon, or OK, or pressing [F6] for the amount claimed to be integrated to the special MYOB field and then added to label H with the code calculated. The code of V indicates to the ATO that the claim is solely for the ESVCLP tax offset.

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At the time of integration from the worksheet, the amount was also passed from item 52 to the Distribution Statement xT worksheet at item 55 where it will populate the special MYOB Tax field that will be used to distribute the offset. This amount will also pre-fill label T, Share of Non-refundable carry forward tax offsets. It is this the amount at label T that is transmitted to the ATO via electronic lodgment.
When each xT is closed, integration occurs to the labels on the face of the return. If there is no beneficiary presently entitled, then the offset will be integrated to label T in the income to which no beneficiary is presently entitled group of labels.

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In this example 50% of the offset is distributed to a beneficiary under a legal disability and 50% is held by the trustee.

[F4] Taxation Estimate

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[F4] Detailed Estimate

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Following the [F4] estimate Preview or Print, if you open the worksheet front entry screen you will see that the amount of the offset given is the whole of the offset claimed and there is no excess to carry forward.

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CCH References

20-700 Outline of innovation incentives

Return to Completing the Early stage venture capital limited partnership worksheet (esv)

Partnership return

Early stage venture capital limited partnership tax offset (esv)

Completing the worksheet and distributing the offset from the partnership return is complex due to the unavailability of receiving or distributing labels in the partnership return.

Completing the worksheet

Go to item 51.

The special box contains entry points to the worksheets for which the ATO has not provided labels in the partnership return, either for the partnership to earn the offset in its own right, and then distributing to partners, or where the partnership receives a distribution of these offsets from another partnership or a trust.

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If the Partnership receives a share of ESVCLP from another partnership or a trust, then that offset would need to be advised to the partners so that the partners can include the offset in their own individual returns. The best way for MYOB Tax to deal with this is to automate the process of distribution.

Example 1: Partnership earns the Early stage venture capital limited partnership due to purchasing shares in the venture capital company

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The amount entered is passed to the special MYOB Tax only fields in the xP. These amounts will be distributed to partners at the same time and in the same way as all income, offsets and credits are distributed. The difference is that these amounts are not transmitted to the ATO electronically.

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The share of offset distributed to the partners is performed when the Distribute button is clicked or [F8] is pressed. The individual return process then takes over and the offset is included in the Distributions from partnerships worksheet (dip) or the Distributions from trusts worksheet (dit) and passed to item T8 to be included in the Estimate and any excess to be carried forward to a future year calculated.

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50% of the offset is distributed to each partner.

Example 2: Partnership receives a distribution of ESVCLP from a trust

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The ESVCLP offset entered in either of the Distributions from partnerships or Distributions from trusts worksheets at item 8 is passed to the esv worksheet as an entry with the code D. This is the same functionality as is used when entering Managed Investment Trust Capital Gains and Foreign income. MYOB Tax generates an entry to be passed to the item at which the income or credit is to be disclosed.

CCH References

20-700 Outline of innovation incentives

Return to Completing the Early stage venture capital limited partnership worksheet (esv)

Early stage investor (ESIC)

If you invest in early stage innovation companies, you may be eligible for a non-refundable carried forward tax offset and modified capital gains tax (CGT) treatment. See Tax incentives for innovation on ato.gov.au.

From 1 July 2016, investors who purchase newly issued shares in a qualifying Australian early stage innovation company (ESIC) may be eligible for:

a tax offset equal to 20% of the amount paid for the shares. This tax offset is capped at a maximum amount of $200,000 for each income year for the investor and their affiliates combined. The offset is not refundable, but can be carried forward to the next income year.
an exemption from CGT on shares continuously held by the investor for between one and ten years. Any capital losses on shares held for less than ten years must be disregarded.

Tax Pre-fill

This schedule can be pre-filled using the Pre-fill Manager. The Pre-fill Manager enables you to download pre-fill reports for clients using the Practitioner Lodgment Service (PLS). You can view these reports in PDF format, and populate the pre-fill information into the client's Tax return. For more information on pre-filling, see Pre-fill Manager.

Tax Pre-fill is dependant on available ATO data. Validate the Tax return by pressing [F3] for a list of the imported values and any errors before lodgment.

Completing the Early stage investor worksheet (esi)

Use the MYOB Tax Early stage investor tax offset worksheet (esi) to record and store the details of these transactions and for the calculation of the amount claimed and any excess not claimed in the financial year, carried forward to be used in a future year.

Work out the total amount you paid for newly issued shares, in qualify early stage innovation companies (ESIC) in 2016-17.

Note: If you do NOT meet the requirements of the ‘sophisticated investor’ test for at least one of your 2016-17 investments in a qualifying ESIC, your investment amount must not exceed $50,000. If your investment amount exceeds $50,000 you cannot claim this offset.

The screens are self-explanatory; however, the front entry screen is different depending from which type of return it is opened:

Company return

Fund and self-managed Fund returns

Individual return

Trust return

Partnership return

Company return

Early stage investor tax offset worksheet (esi)

Completing the worksheet

Go to item 23 and click label M to open the worksheet.

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The Evidence checkbox is mandatory and the Sophisticated checkbox should be ticked if, for at least one of the transactions, the taxpayer passed the sophisticated investor test.

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In the following example, both checkboxes are ticked and the taxpayer will be entitled to claim 20% of the investment amount as a tax offset.

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Click Worksheet, and fill out the details as required.

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Click Close and then press [F6] or click OK for integration to occur to item 23 label M.

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The amount at label M is now automatically passed to the non-refundable carry-forward tax offset worksheet (ncf) at label D in the calculation statement.

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The sum of all offsets in the ncf is integrated to label D.

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The amount at label D is included in the [F4] estimate.

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CCH References

20-700 Outline of innovation incentives

Return to Completing the Early stage investor worksheet (esi)

Fund and self-managed Fund returns

Early stage investor tax offset worksheet (esi)

Completing the worksheet

Go to item D2 and click the label.

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The Eligibility question is mandatory.

Checking the Question checkbox enables the

Worksheet

button.

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Click the Worksheet button and enter the required details in the screen.

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Click OK, the Save Icon or press [F6] to accept the transaction and move it into the stored area at the top of the worksheet.

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If there are no further transactions, click

Close

Click OK, the Save icon or press [F6] to exit the front entry screen and for integration to occur at label D2.

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The sum of the two offsets is pre-filled at label D - Non-refundable carry forward tax offsets.

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This is the offset that will be included in the [F4] estimate and limited to Tax payable after the application of Non-refundable tax offsets. Any excess will be calculated to be carried forward from 2017 to 2018.

Following the [F4] estimate Preview or Print, if you open the worksheet front entry screen you will see that the amount of the offset given is the whole of the offset claimed and there is no excess to carry forward.

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CCH References

20-700 Outline of innovation incentives

Return to Completing the Early stage investor worksheet (esi)

Individual return

Early stage investor tax offset worksheet (esi)

Completing the worksheet

Go to item T8 and press [Enter] or click into the field.

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The Evidence checkbox is mandatory and the Sophisticated checkbox should be ticked if, for at least one of the transactions, the taxpayer passed the sophisticated investor test.

In the following example, both checkboxes are ticked and the taxpayer will be entitled to claim 20% of the investment amount as a tax offset. The taxpayer has also received a distribution of ESIC from both a Partnership and a Trust. The distributed share has the code D. The taxpayer does not need to have passed the sophisticated investor test to receive a distribution.

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Click the Worksheet button and fill out the details as required.

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Click Close and then press [F6] or click OK for integration to occur to item T9 label L.

The amount at label L is the sum of all offsets and this amount is included in the Estimate and any excess to be carried forward to be used in a future year is calculated.

[F4] Estimate

As shown in the print-out of the Estimate, neither has been able to be applied in full.

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CCH References

20-700 Outline of innovation incentives

Return to Completing the Early stage investor worksheet (esi)

Trust return

Early stage investor tax offset worksheet (esi)

Completing the worksheet and distributing the offset from the trust return is, like the partnership return, more complex than the other returns, because:

the offset is claimed at item 52 label H, and
distributed, or becomes an offset to which no beneficiary is presently entitled, at item 55.

The worksheets for these offsets are accessed and completed at item 52 in the special MYOB fields provided to the left of Label H. To accommodate for the ATO’s design, MYOB has had to improvise to deal with the calculation and distribution of two separate offsets. Note that these fields are not ELS/PLS fields and that only Label H will be transmitted to the ATO when lodged electronically. These fields do not appear on the ATO's pre-printed form.

Completing the worksheet

Go to item 52 and press [Enter] at the special ESIC field.

Do NOT click label

H

as there is a Generic schedule behind that label that should not be there. This will be removed in the first Service Pack.

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The eligibility question must be answered and for at least one of the transactions, unless the offset is a share of ESIC from a partnership or another trust, then the taxpayer must have passed the sophisticated investor test.

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Click Worksheet, enter the details and press [Enter] to save the transaction.

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This worksheet provides for multiple transactions. If you have another transaction to enter, repeat the process.

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Click Close and then press [F6] or click OK or the Save icon to integrate the amount and code to the label in the main return. Where both offsets are being claimed, the code is M for Multiple. This code indicates to the ATO that the Trustee is claiming both the ESVCLP and the ESIC tax offsets.

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When the worksheet is saved, integration is to the MYOB ESIC field at Item 52, from where they are transferred to the Distribution Statement xT to the MYOB Tax special distribution fields, to be totalled into label T which is the amount and code that is transmitted via electronic lodgment ELS/PLS:

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50% of the offset is distributed to a beneficiary under a legal disability and 50% is held by the trustee.

[F4] Taxation Estimate

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[F4] Detailed Estimate

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Following the [F4] estimate Preview or Print, if you open the worksheet front entry screen you will see that the amount of the offset given is the whole of the offset claimed and there is no excess to carry forward.

CCH References

20-700 Outline of innovation incentives

Return to Completing the Early stage investor worksheet (esi)

Partnership return

Early stage investor tax offset (esi)

Completing the worksheet and distributing the offset from the partnership return is more complex than the trust due to the unavailability of receiving or distributing labels in the partnership return.

Completing the worksheet

Go to item 51.

The special box contains entry points to the worksheets for which the ATO has not provided labels in the partnership return either for the partnership earning them for distribution the partners, or where the partnership receives a distribution of these offsets from another partnership or a trust.

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Example 1: Partnership earns the Early stage investor due to investing in the ESIC on behalf of the partners

Enter Y or press [Enter] at the field to open the front entry screen.
The eligibility question is mandatory.

The sophistication checkbox should only be ticked if at least for one transaction the taxpayer passed the sophisticated investor test. There is no offset available where the taxpayer is not a sophisticated investor.

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Click Worksheet to enter the details of any ESIC transactions. The fields are self-explanatory.

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Click OK or [Enter] to accept the transaction and move it to the storage area at the top of the worksheet.

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If there are no more transactions, click Close.

At the front entry screen, click

OK

, the

Save

icon, or press [

F6

Open the Distribution Statement at item 51 to see the amount included in the special MYOB Tax only ESIC field.

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Distribute manually to the partners, or close the xP and press [F8], or click the Distribute button to perform automatic distribution. If the partners’ returns are in your database, then distribution will be to item 13 and from there to T8 and T9 as both offsets are not present.

Example 2: Partnership receives a distribution of ESVCLP from a trust

If the Partnership receives a share of ESIC from another partnership or a trust, then that offset would need to be advised to the partners so that the partners can include the offset in their own individual returns. The best way for MYOB Tax to deal with this was to automate the process of distribution.

If the only transaction is the result of a distribution from another partnership or from a trust, then the sophistication of the partnership is not required.

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Go to item 51 and open the worksheet.

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When you open the worksheet, the transaction will have been passed to the worksheet and stored.

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When the Distributions from trust worksheet is saved, the ESIC amount is created as a transaction with the type D and from there is passed to the special MYOB Tax only fields in the xP. These amounts will be distributed to partners at the same time and in the same way as all income, offsets and credits are distributed. The difference is that these amounts are not transmitted to the ATO electronically.

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The share of offset distributed to the partners is performed when the Distribute button or [F8] is pressed. The individual return process then takes over and the offset is included in the Distributions from partnerships worksheet (dip) or the Distributions from trusts work-sheet (dit) and passed to item T8 to be included in the Estimate and any excess to be carried forward to a future year calculated.

50% of the offset has been distributed to each partner and the sum is shown at item 51 on the face of the return.

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CCH References

20-700 Outline of innovation incentives

Return to Completing the Early stage investor worksheet (esi)

Other non-refundable tax offsets dialog

The Other non-refundable tax offsets dialog opens from the Individual return at item T10. This dialog provides the breakdown of the total amount at T10 and pre-fills the sum of the amounts calculated in the following worksheets:

Joint Petroleum Development Area (JPDA)
Infrastructure Borrowings Offset
Miscellaneous Other Offsets

For AE and Series 6 & 8, the Other non-refundable tax offsets dialog opened from Tax Calculator includes these and other relevant offsets. Refer to Other non-refundable offsets.

This dialog is available from Preparation > Schedule > Other non-refundable tax offsets (oos). To open any worksheet from the dialog, click the button or [Underlined Letter].

Back to Tax Offsets Worksheets

Joint Petroleum Development Area (JPDA)

In order to receive a correct Assessment and to calculate the amount of the offset to be included in the estimate, you will need a copy of the Timor Sea Treaty Joint Petroleum Development Area instructions for the current year (NAT 8277) available on the ATO website.

Enter the description and the amount of the offset to be included in the Estimate.

Back to Other non-refundable tax offsets dialog

Infrastructure Borrowings Offset

You may be able to claim a tax offset if you elected to have interest derived from your investment in infrastructure borrowings included as part of your assessable income.

Infrastructure Borrowings include:

interest from land transport facilities tax offset scheme or infrastructure borrowings scheme, OR
Interest derived from the land transport facilities tax offset scheme or infrastructure borrowings

In most cases the corporate tax rate percentage will be 30%. However, if the entity you derived interest from is a small business entity, that is, an entity with an aggregate annual turnover of less than $10 million, the corporate tax rate percentage will be 27.5%. If you are unsure of the corporate tax rate percentage of the entity you derived interest from, contact the entity.

If the interest is derived from the land transport facilities tax offset scheme it is subject to an annual upper limit under an agreement between the lenders, the borrowers and the Minister for Transport and Regional Services, you cannot claim a tax offset for the part of the interest that exceeds that upper limit.

Back to Other non-refundable tax offsets dialog

Miscellaneous Other Offsets

Miscellaneous Other Offsets contains a spare field provided for those instances where an offset not calculated by Tax is to be included in the Estimate.

For example:

Income Arrears Offset: Tax does not support this calculation. Therefore, if you have manually calculated the amount, then enter it in this field for it to be included in the Estimate.

Back to Other non-refundable tax offsets dialog

Other refundable tax offset worksheets

The Other refundable tax offsets is a holding dialog opened from the Individual return at item T11. This dialog provides the breakdown of the amount at T11 and the pre-fills values from the following worksheets:

Exploration Credits
Special Disability Trusts Offsets worksheet

Back to Tax Offsets Worksheets

Exploration Credits

If you are an Australian resident for the whole of the income year you may be entitled to a refundable tax offset equivalent to the amount of exploration credits you have received.

If you have received exploration credits directly or indirectly from your shareholdings in a greenfields minerals explorer, you can claim your tax offset by completing item T11 of the individual income tax return for the 2016-2017 income tax.

T11 in the Individual return has been updated to include a new worksheet to record Exploration credits received by the taxpayer.

Where such credits have been received into the Distribution from Partnerships and/or the Distributions from Trusts worksheets (dip and dit), on answering the eligibility question, the data entry fields will be activated and any share of Exploration credits received will be defaulted.

You are only able to benefit from your share of exploration credits to the extent that you would have been entitled to a tax offset if the distribution of the exploration credit from the trust or partnership were instead a distribution of a hypothetical franked distribution that:

Was of the same amount as your share of the exploration credit.
Was made by the same entity that issued the exploration credit, in the same circumstances and in relation to the same interests.
If you are a corporate tax entity, was made to you as if you were not a corporate tax entity.

The From Company field remains open to edit and must be entered by the preparer of the tax return.

Tax Pre-fill

This schedule can be pre-filled using the Pre-fill Manager. The Pre-fill Manager enables you to download pre-fill reports for clients using the Practitioner Lodgment Service (PLS). You can view these reports in PDF format, and populate the pre-fill information into the client's Tax return. For more information on pre-filling, see Pre-fill Manager.

Tax Pre-fill is dependant on available ATO data. Validate the Tax return by pressing [F3] for a list of the imported values and any errors before lodgment.

Special Disability Trusts Offsets worksheet

For information from the ATO website click Special Disability Trusts - tax return lodgment instructions.

The SDT offset represents the credit for tax paid by a trustee to the beneficiary of a Special Disability Trust. In previous years, this amount was claimed at Item 13 Share of credit for tax paid by trustee, label S. However, that was not optimal label S credits are limited to gross tax payable. Having recognised this shortcoming, the ATO has provided an area to claim back the tax paid by the Trustee for Section 98 estimates so that it is fully refundable.

Click the label at T9 or click [Alt+S] to open the holding dialog and select the Special Disability Trusts offset worksheet.

Back to Other refundable tax offset worksheets

Spouse Details

The Spouse Details dialog contains all the information relative to the taxpayer's spouse that is needed to calculate a correct estimate of tax payable or refund due.

Spouse Date of Birth

If you have completed the spouse’s return in your Tax Ledger, you can import all the Spouse details necessary to complete the taxpayer’s return by clicking [F10] at the Spouse Date of Birth field in the taxpayer’s return.

If you subsequently alter any values in the spouse’s return that change the spouse’s taxable income, you will need to refresh the spouse’s details in the taxpayer’s return by again using the [F10] import functionality.

Spouse dialog

With the splitting of the Reportable Fringe Benefits into exempt and non-exempt employers, the spouse dialog is now a two-tab dialog. All the income items are contained in the Income tab:

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To open the Spouse dialog click the Schedule Icon or [Alt+S] at any field or click any label at the item. It can also be opened by double clicking the SD item in the Navigation bar. Other access points to the Spouse dialog are provided when you are completing:

Senior and pensioner tax offset at T1
Invalid spouse or carer offset at T6
(AE and Series 6 & 8) The Calculation Profile in the What-if calculator

Spouse an Australian resident?: The residency status of the spouse is required for the calculation of some dependency offsets and for those situations where the taxpayer is non-resident in receipt of an Australian Government allowance (item 5) and/or an Australian Government pension or allowance (Item 6). The residency of the spouse is required to calculate tax at the correct rate so that any amount of SAPTO available to transfer to the taxpayer is correct.

Spouse DOB: Once entered, this date will roll over from year to year.

Married to taxpayer for full year: Select this checkbox to indicate that the taxpayer was married or in a de facto relationship for the whole of the income year. If the spouse died during the income year, although the taxpayer is considered to have had a spouse for the whole of the income year, it is necessary for the pro-rating of the spouse’s income for Combined Adjusted Taxable Income purposes that the date of death be entered.

Dates married if not for full year: Enter the dates the taxpayer maintained a spouse. The dates entered must be in the current income year. If the taxpayer had more than one spouse during the year, enter the dates for the person who was the spouse at 30 June of the current income year.

Spouse income reviewed checkbox: It is an ATO requirement for returns lodged electronically to complete each of the Spouse labels, even if the value is zero. If there is no amount to enter, then a zero must be entered. Tick the Spouse income reviewed checkbox and Tax will populate the zeroes for you.

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Taxable income (Label O): The amount entered here should be the spouse's Total net taxable income.

Australian Government pensions/allowances (Label P): Enter the amount of any Australian government pensions and allowances the spouse received in the current income year (not including exempt pension income). Select the applicable pension code from the list provided. Do NOT select a Code if the spouse did not receive an Australian Government Pension or Allowance at item 6 in the spouse’s return.

Exempt pension income received (Label Q): If the spouse received any exempt pension income, enter that amount. The list of exempt pensions is too long to include here. The ATO website link Amounts that you do not pay tax on may provide relevant information.

Label A - Amount of your spouse's reportable superannuation contributions which is the total of reportable employer superannuation contributions and deductible personal super contributions.

Label B - Your spouse's amount of any tax-free government pension paid under the Military Rehabilitation and Compensation Act 2004 that have not been included at label Q above.

Label C - Your spouse's target foreign income: Target foreign income is any foreign income earned or received by the taxpayer that is not included in assessable income; for example, exempt foreign income and regular gifts of money from a foreign source or foreign source moneys won in a promotion.

Label D - Your spouse's total net investment loss: The amount that their financial investment deductions exceed their financial investment income plus the amount that their rental property deductions exceed their rental property income.

Label E - Child support your spouse paid: Include the total amount of child support payments or benefits your spouse provided to another person for the maintenance and care of your child or children. Do not count any payments or benefits provided to you by your spouse unless you live apart on a permanent or indefinite basis.

Label F - If your spouse is 55 to 59 years old, show here the taxed element of a superannuation lump sum they received (other than a death benefit), that does not exceed their low rate cap:

If the taxpayer does not know all of these amounts, a reasonable estimate of them may be made.

Your Spouse's Adjusted Taxable Income for the current income year

Adjusted taxable Income (ATI) is the sum of the income fields in this dialog (excluding label F). It is important to complete any of these fields that are relevant to the spouse as these directly affect the taxpayer's eligibility to receive certain offsets and other credits.

Other Attachments Schedule (att)

Where you consider that special circumstances apply, this item should be completed and an Other attachments schedule (att) completed and lodged with the return.

If the Commissioner does not consider that special circumstances applied, you will be advised.

Amounts on which FTD tax has been paid (Label U): Enter the amount of any distributions to the spouse on which Family Distribution Tax (FDT) has been paid and which the spouse would have to have shown as assessable income if the tax had not been paid.

Sec98 Distribution received from Trusts (Label T): Enter any amount of the spouse’s share of trust income on which the trustee is assessed under section 98 and which has not been included in the spouse’s taxable income. A Trustee is assessed under section 98 of the ITAA 1936 in relation to a presently entitled beneficiary under a legal disability.

Total Reportable Fringe Benefits (Label S): Enter any amount of total reportable fringe benefits amounts received by the spouse.

Required for Medicare levy surcharge purposes

Less: Zero tax rated element of super lump sum (label F): If the spouse is 55 to 59 years old, enter the taxed element of a superannuation lump sum the spouse received in the current year (other than a death benefit), that does not exceed the low rate cap.

Lump sum payments in arrears (Australian or foreign): This is not a return label and is required for the calculation purposes only. Enter any amount of a lump sum payment in arrears that the spouse has declared at either or both of items 20 and 24 in the individual tax return for the income year. If the taxpayer has become eligible for the Surcharge because the spouse received a lump sum payment, the taxpayer may become eligible for the Medicare Levy Surcharge tax offset.

Customer Reference Number (CRN) – Back page of Individual return

If you completed any of the above labels do you consent to use all or part of your tax refund to repay your Spouse’s Family ATO debt?

If Yes, enter your Spouse’s Customer Reference Number (CRN)

The CRN field is only relevant to the Income Tax Return and not any What-if scenario.

For What-if scenarios you may create a calculation scenario with the same Code as the Return and when Pre-fill is selected all the spouse details contained in that return will be defaulted to these fields and may be edited to suit the tax scenario being explored.

Back to Spouse Details Item SD

Intangible/Tangible depreciating assets worksheet (it)

This worksheet can be used with the form types: I; C; P and T, for recording purposes only. This worksheet will not be lodged with the return.

Small business taxpayers are not required to complete any of these items.

The values integrate to the main returns at:

Intangible depreciating assets first deducted,
Other depreciating assets first deducted,
Termination value of intangible depreciating assets, and
Termination value of other depreciating assets.

Intangible depreciating assets first deducted: This item shows the cost of all intangible depreciating assets for which the taxpayer is claiming a deduction for decline in value for the first time. Intangible depreciating assets include any item with a type of Intangible whether allocated or not allocated to a low-value pool, and any amount allocated to a software development pool (even though a deduction may not have been claimed in the current year)

The Depreciation worksheet will integrate to this item to show the cost of all items allocated to a software development pool, or any asset where the type selected was Intangible, and the start date for decline in value was in the current tax year.

Other depreciating assets first deducted: This item shows the cost of all depreciating assets for which a decline in value is being claimed for the first time, excluding intangible assets.

The Depreciation worksheet will integrate to this item the cost of all assets where the type selected is Motor vehicle, Exploration\Prospecting tangible, Personal use, Collectable, or Other tangible asset, and the start date for decline in value was in the current tax year. This is for all assets whether allocated or not allocated to a low-value pool.

Termination value of intangible depreciating assets: This item shows the termination value for all intangible depreciating assets where a balancing adjustment event occurred in the current year. Intangible depreciating assets will include any item with the type Intangible whether allocated or not allocated to a pool, and any consideration received in relation to a software development pool.

The Depreciation worksheet will integrate to this item to show any asset where the type selected was Intangible, and for which the disposal date was in the current tax year.

Termination value of other depreciating assets: This item shows the termination value for all tangible depreciating assets where a balancing adjustment event occurred in the current year.

The Depreciation worksheet will integrate to this item with the cost of all assets where the type selected was Motor vehicle, Exploration\Prospecting tangible, Personal use, Collectable, or Other tangible asset, the disposal date for which was in the current tax year. This is for all assets whether or not they were allocated to a low-value pool (LVP).

Tax Pre-fill

This schedule can be pre-filled using the Pre-fill Manager. The Pre-fill Manager enables you to download pre-fill reports for clients using the Practitioner Lodgment Service (PLS). You can view these reports in PDF format, and populate the pre-fill information into the client's Tax return. For more information on pre-filling, see Pre-fill Manager.

Tax Pre-fill is dependant on available ATO data. Validate the Tax return by pressing [F3] for a list of the imported values and any errors before lodgment.

To access the non-PLS Tax Office Pre-fill Report Data:

INSERTIMAGE Tax Office Pre-filled Report Data Facility

After the Share Account? field in this worksheet, select Utilities > Import from Tax Office Pre-fill Report...

For full information on using the Pre-fill function refer to Pre-filling Tax Return data from Tax Agent’s Portal .

Shared income

Tax provides functionality to share such income, and any TFN credits attached to it, with other returns.

The taxpayer's share of the total amounts entered integrates to the Interest item labels in the Individual return.

Three sets of fields are provided in this worksheet. To add extra entries, press [Ctrl+Insert] at any of the fields in the entry.

The fields in this worksheet accept cents. You must key the decimal point to avoid amounts being treated as whole dollars.

Financial institution, Branch and Account Number: These details identify the source of the interest income. To add extra entries to the worksheet, press [Ctrl+Insert].

TFN Tax Withheld: Enter the amount of tax withheld for failure to quote a TFN, in dollars and cents.

Interest: Enter the amount of interest income received, in dollars and cents.

Share for this Return

This field is calculated by the system and will always be the amount that is added to the Total share for this return to be integrated to labels L and M in the main return.

Share account?: Entering Y at this field will open the Index of Joint owners. Details entered and recorded in this Index will be rolled over from year to year. To create the transaction for Share details:

From this Index click New, the Share details screen will be displayed.
In the General tab, Share to: field click [F10] or click on the ellipsis to open the Select Return Index.
Select the return to receive the share.
Enter the percentage share for that return.
Click [F6] to save the entry.
Click Cancel to return to the index if there are no other returns to share this interest amount.

Edit or Delete Shared Interest Entries

Refer to Index of Joint Owners.

Joint Owner: Joint owner will only be displayed where Share account? is Y

Distribute

When the Distribute button [F8] is selected the income will be shared in accordance with the details and percentage entered in the Share details dialog and a corresponding interest worksheet will be created in the Sharee's return.

Printing the worksheet

When the worksheet is printed, the Host return will show the details of the transaction and the details of the Share return: the Return Code and Name of the taxpayer the interest was shared to.

The Sharee's return will show the details of the transaction and the details of the Host return: the Return Code and Name of the taxpayer the interest was shared from.

For non-residents (those taxpayers who are not Australian residents for tax purposes) do not include interest at this item where the financial institution deducted tax at source, as no further tax is payable on this income in Australia. However, if withholding tax was not deducted from the interest earned, then that interest should be entered at this item. When the estimate is prepared the interest income will be taxed at 10 cents in the dollar.

Early payment interest credit: This is the total amount of interest received from the ATO in respect of payments of various tax liabilities made 10 or more days before the payment was due. Where an early payment interest credit was claimed in the previous year's return, that amount will be rolled over to this field and be included in the Interest income declared for the current year.

Total share for this return

These are the totals that will be integrated to labels L and M. The Interest amount, label L is truncated on integration.

Quick access to Deductions: Type Y at this field and press [Enter] to open the Interest Deductions worksheet (idd).

Bank, Branch and Account

These details identify the source of the interest income and are for record keeping purposes only. Where the taxpayer has more than one account with a financial institution and shares that interest with the same taxpayer, enter the bank account number to avoid overwriting the first transaction with the second transaction.

TFN Tax Withheld

Enter the amount of tax withheld for failure to quote a TFN, in dollars and cents.

Interest

Enter the amount of interest income received, in dollars and cents.

Apportioned

These two fields contain the taxpayer's amount of the TFN withheld and the interest received for that transaction. If the account is shared with another taxpayer, the amount in this field will reflect only the current taxpayer's share of those amounts.

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Share account?

To share these amounts with another taxpayer or taxpayers, whether or not the Practice is the preparer of the Sharee's tax return, enter Y in this field to open the Index of Joint Owners. The text details entered and recorded for the Sharee will be rolled over from year to year.

To create the Sharee record:

From this Index select New, the Share Details screen will be displayed.
In the General tab, Share to: field click [F10] or click the ellipsis to open the Return Index.
To select the return by the taxpayer's name, click the Name sort column and start typing on the cursor bar as much of the taxpayer's name as is required to identify the return and press [Enter].

Alternatively, if you know the return code, then type as much of the return code as is required to identify the return and press [

Enter

]. Because there are usually a lot of names in the Select return index it is not advisable to scroll through the Index.

Click

Select

Enter the percentage share for that return.
Click [F6] to save the entry.
Click Cancel to return to the index if there are no other returns to share this interest amount.
Click Close.

Share account details

Where there are joint account holders, identifying details against the Share account? field will only be displayed when that field displays Y for yes. Currently there is only room on the data entry screen to show the details of the first taxpayer's return being shared to. The print-out details all taxpayers with whom the amounts are shared.

Editing previously shared transactions

To share transactions of any type with another tax return in your database, MYOB Tax relies on the Return Code to find the relevant return and then the description of the transaction in order to either create a new transaction in the Sharee's return or to update an existing entry.

If an amount is changed after the Share has been done, the entry in the Sharee's return will be updated when the worksheet is closed in the Host return (the Host return is the return in which the transaction originates).

However, as previously mentioned, care must be taken when the taxpayer has more than one account with any one financial institution or company. In such cases, you must make some differentiation in the first 32 characters of the description if you are sharing this income with the same taxpayer as the first transaction from the same financial institution, as not to do so will overwrite the previous transaction as though you are editing that transaction.

For example, if you earn interest from two Westpac accounts, then enter the account number or the Branch name in the second entry.

Early payment interest credit

This is the total amount of interest received from the ATO in respect of payments of various tax liabilities made 10 or more days before the payment was due. Where an early payment interest credit was claimed in the previous year's return, that amount will be rolled over to this field and be included in the Interest income declared for the current year.

Note that the Early payment interest credit does not apply to Partnership returns.

Total share for this return

The total share for this return (the return currently being prepared) is the sum of all amounts in the Apportioned columns for each entry and is the amount that will be integrated to the labels in the main return as follows:

Form	Interest	TFN Withheld	Deductions
Company	Item 6 label F	H3; schedule PS	No integration
Fund	Item 10 label C	H3 holding dialog	No integration
Partnership	Item 11 label J	Item 11 label I	Item 16 label P and dai worksheet
Self-Managed Fund	Item 11 label C	H3 holding dialog	No integration
Trust	Item 11 label J	Item 11 label I	Item 16 labels P; R and dai worksheet

Deductions from Interest income

For Partnerships and Trusts the total deduction entered in to this worksheet integrates to the Deductions relating to Australian Investment Income item in the main return. To add extra lines for deductions, press [Ctrl+Insert].

For Companies and Funds: As there is no dissection of deductions relating to Australian or Overseas interest, any deductions you do enter will be required to be manually entered at item 6 labels V and/or J for the Company return and item 11 labels A and/or B in either of the two Fund returns.

Integration to returns

When all transactions have been entered:

Click [F6], OK or click the Back icon.
Tax transfers all relevant amounts to the taxpayer
Tax creates an Interest worksheet or adds an entry in an existing Interest worksheet for any Sharee return contained in the Practice's database.

Those entries will be greyed out and therefore not available to edit. If editing is required it must be done in the Host return, that is, the return from which the share was made.
If any taxpayer receiving a share of this income and any TFN withheld attached to it is not in your database a message will be generated advising that the share could not be done.

It is important to note that if you are sharing income with another taxpayer whose return is in your database, that return must be currently 'in progress' that is, it must have been rolled over from the previous year.

Printing the worksheet

When the worksheet is printed, the Host return will show the details of the shared transaction and the details of all returns having a share in that transaction.

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The Sharee's return will show the details of the transaction and the details of the Host return.

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For non-residents, do not include interest at this item where the financial institution deducted tax at source, as no further tax is payable on this income in Australia. However, if withholding tax was not deducted from the interest earned, then that interest should be entered at this item. When the estimate is prepared the interest income will be taxed at 10 cents in the dollar.

Back to Interest Income

Index of Joint Owners

This index lists the returns to which a share is allocated.

To maintain this list of returns:

Select New to add the Share Details of a return to the list.
Highlight a return to be processed and select:

Properties to alter the percentage to be apportioned to the return, or
Delete and then select Yes to remove the return from the list.

To cease editing click Close.

Integration Points

Integration is provided for:

Deductions from the motor vehicles worksheet (mve)
Deductions from Depreciation worksheet
Deductions from Schedule BJ (ATO Interest and dividend deduction schedule)

Total Interest Deduction: This amount integrates to itemD7.

Landcare and Water Facility Carried Forward

This section only applies if the income tax liability for the previous income year did not absorb all of the landcare and water facility tax offset available for that year.

If the taxpayer earned taxable income in the previous year the brought forward landcare and water facility offset has to be reduced by any unused net exempt income derived in that year. Unused net exempt income is any net exempt income remaining after deducting any total allowable prior year losses from the previous year's net exempt income.

If the taxpayer has a tax liability in the current year and intends to apply any brought forward landcare and water facility tax offset against that tax liability, the brought forward offset must also be reduced by net exempt income that was derived this year. Every dollar of net exempt income reduces the brought forward tax offset amount by 30 cents. Where the entity is a small business entity, the reduction amount is calculated at 27.5%.

Excess Offset from the previous income year's Tax Assessment: Enter the balance of the tax offset not yet claimed from the previous year's income estimate, as advised by the ATO.

Net Exempt Income: Enter any exempt income, such as that earned from lottery winnings or earned by a charitable, religious or educational institution.

Exempt Foreign Income: Enter any attributable foreign income.

Less: 27.5% of Net exempt income and Exempt Foreign Income: This is calculated as 27.5% of the two preceding fields.

Less: 30% of Net exempt income and Exempt Foreign Income: This is calculated as 30% of the two preceding fields. The amount calculated is deducted from the Excess Offset Brought Forward.

Back to Tax Offsets Worksheets

Losses Transferred in, out or Carried Forward (hi3)

This worksheet does not integrate to the Company return and is created by selecting Preparation > Schedule > Losses transferred in/out/carried forward (hi3)

For information on completing this worksheet refer to Form C, Label S-Tax Losses transferred in (from or to a foreign bank branch or a PE of a foreign financial entity).

Back to Supporting schedules and worksheets

Medicare Levy Worksheet

This dialog is used when calculating the amount of Medicare levy to be included in the estimate of tax payable, based on the number of days full and/or half exemption.

This dialog includes:

Medicare Levy Exemption Categories
Part Year Residency
Medicare Levy Surcharge (mls)

Medicare Levy Exemption

Do not enter a number of days if you are a low income earner.

Full Medicare Exemption Part B: Select from the list, the exemption category the taxpayer falls under and enter the number of days for which the taxpayer is claiming the full exemption.

Half Medicare Exemption: Enter the number of days for which the taxpayer is claiming half exemption.

Reduction

Marital Status at 30th June: Enter the one character code for the marital status of the taxpayer at this field. Click [F10] to select from a dropdown list:

A Married/de facto at 30/06 of the income year or spouse died during this income year
B Sole parent (this is also used for notional purposes - zone rebate base amount)
G Entitled to Child-Housekeeper rebate
H Entitled to Housekeeper rebate
P Pensioner, Married or Separated due to illness
G, H and P are non-ATO codes and are used internally during calculations.

Spouse's Taxable Income: This field is applicable only if you had a spouse at 30 June. The Spouse Details dialog (refer to Spouse Details) provides the necessary fields for you to enter the spouse's taxable income. The spouse's taxable income is required for the family income test.

Dependent Children/Students: Enter the number of dependants (children to the age of 21 or students to the age of 25 in full time education) with Adjusted taxable income less than $1786. The number of dependants is required for calculating the Medicare Upper Threshold.

For the Family Reduction to be calculated correctly, you must enter a zero if the taxpayer and spouse have no children.

Medicare

Primary Medicare Payable: The amount displayed is recalculated each time the taxable income is changed.

Medicare Levy Surcharge Payable: This amount is calculated in accordance with the taxpayer's Private Health Insurance status and Adjusted taxable income for Medicare levy surcharge purposes.

Back to Supporting schedules and worksheets

Medicare Levy Exemption Categories

This screen lists the categories of taxpayers that are exempt from the Medicare levy.

Back to Medicare Levy Worksheet

Part Year Residency

The Part Year Residency worksheet may be opened in the Individual return from item M1 or A2.

This dialog is used to record the date at which the taxpayer's residency in Australia commenced or ceased. Part year residency affects the tax free threshold.

Threshold Category: From the dropdown list select one of the following:

Commenced residency (arrived in Australia), or
Stopped residency (departed from Australia).

Enter relevant Date: From the details entered the system calculates the revised tax-free threshold and displays:

the number of months,
the number of days resident, and
the number of days the taxpayer is exempt from the Medicare levy.

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Back to Medicare Levy Worksheet

Medicare Levy Surcharge (mls)

If you or any of your dependants do not have the appropriate level of health cover and your taxable income for surcharge purposes is above the relevant threshold the Medicare Levy surcharge will be raised and included in the estimate.

Depending on your income for Medicare levy surcharge (MLS) purposes, the MLS rate is 1%, 1.25% or 1.5% of:

Your income for surcharge purposes includes your:

taxable income (including the net amount on which family trust distribution tax has been paid)
exempt foreign employment income if your taxable income is $1 or more
reportable fringe benefits amount, as reported on the payment summary
total net investment loss (includes both net financial investment loss and net rental property loss)
reportable super contributions (includes both reportable employer super contributions and deductible personal super contributions).

However, if you are aged 55 to 59 years old, you deduct any taxed element of a super lump sum, other than a death benefit, which you received that does not exceed your Low rate cap on super lump sum benefits.

If you exceed the threshold, you are liable to pay the Medicare levy surcharge.

Income for surcharge purposes is only used to determine whether you are liable to pay the Medicare levy surcharge. It is not used to calculate how much surcharge you pay.

The Medicare levy surcharge is only levied on the total of your taxable income and total reportable fringe benefits amount (including the net amount on which family trust distribution tax has been paid).

Fund Detail

Select Details of Funds to add the details of the Fund policy which are required to determine the level of health cover and hence the number of days NOT liable for the surcharge.

Medicare Levy Surcharge and Fund membership details

These are largely self-explanatory.

For the whole year were you and all dependants covered by private hospital cover? Select this checkbox to answer 'Yes'.

Resident: Select this checkbox to indicate that the taxpayer is a resident of Australia.

Marital status: Click [F10] to select from the list. If the field is left blank, the taxpayer is considered to be single.

Date Married From / To: Only enter dates if you were married or separated during the year. Dates must be within the relevant income year.

Priority Agreement: De-select this to record the share of the offset to the taxpayer as an amount less than 100%.

Share of offset to the taxpayer: This will be 100% where a Priority Agreement is indicated.

Number of dependent children: Enter the number of eligible dependent children.

Zero Amount?: Select this checkbox to indicate that the number of dependent children is zero.

Number of children remaining with the taxpayer: Enter the number of eligible children who are dependants of the taxpayer and remained with the taxpayer following a separation from the spouse.

Income Details: The field displays the details of the income for Medicare levy surcharge purposes and Private Health Insurance Rebate for the taxpayer and the spouse. These are derived from amounts entered in the Income Details dialog refer to Income Test Details. From the Income Details dialog you can access the Spouse Details dialog where the income for the spouse is entered, refer to Spouse Details.

Other Details relevant to the Calculation

These are adjustment fields to be used for complex family situations.

Days had a spouse: This amount is calculated by the system from the dates entered in the Dates Married field.

Days under the MLS threshold: This amount is calculated by the system from other information entered in the dialog.

Days exempt from Medicare: This amount is calculated by the system from all the other details entered in the dialog.

Days in fund: This amount is calculated by the system from all the other details entered in the dialog.

Add: Days otherwise not liable: This field is provided for the user to adjust the number of days Liable where the taxpayer and/or spouse have different Health Cover and for other complex situations where the system cannot calculate the adjustment days.

Less: Days exemption overlap or are otherwise n/a: This field is provided for the user to adjust the number of days Liable and is to account for overlap days where there is full or part year residency and an exemption to the Medicare levy and Fund membership, and the Fund membership days and Medicare exemption days occur simultaneously.

Number of days not liable for surcharge (maximum 365): This field is calculated by the system and is the sum of all the above fields limited to 365 days in any income year (366 in a leap year).

Schedule Code	Worksheet/ATO Schedule for integration of the depreciation deduction amount	Multiple schedule	Return Type
d	Deduction for decline in value of depreciating assets, item 7 label F		C
dip	Distributions received from Partnerships worksheet (dip)		I, C, P, T
dit	Distributions received from Trusts worksheet (dit)		I, C, P, T
ren	Rental Schedule (ATO ELS B)	Y	I, C, F, MS
ref	Foreign rental schedule	Y	I
a	Schedule A Reconciliation items		I, P, T
b	Schedule B Non-PP Business Income	Y	I, P, T
c	Schedule C PP Income	Y	I, P, T
I - WRE deductions	Work-related travel (D2) Other work related expenses (D5) Cost of managing tax affairs (D10)		I
w	Work-related Expenses schedule (ATO ELS W) opened from Preparation > Schedule, then Depreciation fields in the worksheet.	Y	I
mve	MVE worksheet at item D1, Depreciation and Deductible balancing adjustment fields in the worksheet.	Y	I
sed	Work-related self-education expenses at item D4, Depreciation field in the worksheet		I
idd	Interest Deductions (idd)		I
ddd	Dividend Deductions		I
oti	Other income, item 10 label S		F
oti	Other income, item 11 label S		MS
otd	Other deductions, item 11 label L		F
otd	Other deductions, item 12, labels L1 and L2		MS
d	Deduction for decline in value of depreciating assets, item 11 label E		F
d	Deduction for decline in value of depreciating assets, item 12 labels E1 and E2		MS
rep	Rental schedule (ATO BR)		P, T
dai	Deductions relating to Australian investment income, item 16		P, T
P	Other Deductions, item 18 Amounts from depreciation worksheet		P
T	Other Deductions, item 18 Amounts from depreciation worksheet		T

Division 7 Dividend and Debenture (DDB)
	The Manager, CIDC International PO Box 2090 Chermside Centre QLD 4032
	INTEREST AND DIVIDEND PAYMENT DETAILS
1	Shareholders and Dividends
	Name	E184
	Address	E185/E186/E187/E188
	Tax File Number	E481
	Class of Shares	E105/E189
	Number of Shares	E170
	Paid-Up Value	E117
	Dividends Paid/Credited	E118
	Name	E390
	Address	E391/E392/E398/E395
	Tax File Number	E381
	Class of Shares	E320/E396
	Number of Shares	E340
	Paid-Up Value	E330
	Dividends Paid/Credited	E331
2	Interest Payments Greater than $100
	Name	E190
	Address	E191/E192/E193/E194
	Tax File Number	E482
	Amount of Interest	E171
	Name	E390
	Address	E391/E392/E398/E395
	Tax File Number	E381
	Amount of Interest	E340
3	Debenture holders
	Name	E195
	Address	E196/E197/E198/E199
	Tax File Number	E483
	Amount of Interest	E172
	Name	E390
	Address	E391/E392/E398/E395
	Tax File Number	E381
	Amount of Interest	E340
4	Total Debenture Interest Total amount of interest paid or credited to debenture holders where names and addresses of debenture holders are not supplied:		E173

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Options available:

Important: Co-owned assets

Details of Asset

Foreign resident capital gains withholding (FRCGW)

Method

Frozen Index

Discount

Residency Status at 8/5/2012

Index of Exemptions

General Exemptions

Roll-over or Retirement Exemptions

Shared Ownership

Capital Additions

Allowed as Deductions

Deductions Recouped

Section 104-70 Income

Prior Year Capital Losses

Application of Capital Losses

Discount testing period

What are the beginning and end dates

Qualifying the acquisition date

Periods of residency

Manually calculating the CGT discount percentage

Entering the CGT Status details

What do you have to calculate and enter?

How Tax manages the available resident days

Market value method

Applying Losses

Tax applies losses in the standard order:

Related topics

Capital Gains assets with category type Z

Small Business Roll-over (Subdivision 152-E of the ITAA 1997)

Related topics

Related topics

Total of individual years do not match total losses brought forward

Related topics

Index

How to open the Capital Works Deductions Index:

The Index Column headings are:

Item

Integration

Amount

Description

Button options available:

How to Complete the Capital Works worksheet

Notes on Capital Works Deductions

Deductions relating to Australian investment income (label P and R)

Deleting the dai worksheet from the return

Related topics

Deductions relating to Australian investment income (labels P and R)

Related topics

Deferred losses from Partnership Activities Label F

Business Loss Activity Details (Item P9)

Zone offset

Overseas forces tax offset

Circumstances tab

Base amounts tab

Related topics

Sole Parent Special circumstances

Eligibility

The taxpayer is eligible, if:

The offset is calculated as 18% of the lesser of:

Parameters

Invalid relatives

Parents/Parents-in-law

Depreciation Asset Index

The Buttons on the right behave as follows:

Column Headings

Related topics

Tab Cards

General small business pool – temporary accelerated depreciation from 12 May 2015

Item Details

What happens if you no longer hold or use a Depreciating Asset?

A balancing adjustment event occurs for a depreciating asset when:

Situations where general balancing adjustment rules do not apply:

The legislation has the effect of:

Maintaining the balancing adjustment offset for small business taxpayers was an interim measure until 1 July 2001.