Item 16 - Deductions relating to Australian investment income, franked distributions

If the deduction amount against Interest earned is entered in the Interest income worksheet (int) at the time of recording the interest received transactions, that amount will integrate to the Deductions relating to Australian investment income worksheet (dai) at label P. Refer to Interest Income worksheet (int) - entities.

If the TOFA rules apply to the trust, include all deductions relating to Australian investment income from financial arrangements subject to the TOFA rules at P or R.

Refer to Guide to the taxation of financial arrangements (TOFA) rules on the ATO website.

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. If the LIC dividend is franked (either fully or partially) then show at R any deduction relating to a LIC capital gain.

If the LIC dividend is unfranked, then show at P any deduction relating to the LIC capital gain. The listed investment company's dividend advice statement shows the LIC capital gain amount.