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Small business income tax offset for Individuals

From the 2016–17 income year, a partner who is an individual may be entitled to a tax offset. The offset is on the tax payable on their share of net small-business income distributed from a small-business entity partnership.

Partnerships that are small-business entities need to work out the partnership's net small-business income and the partner's share of that income.

Small business eligibility

Is the taxpayer a small-business entity?

Expanded access to small-business concessions:

From 1 July 2016, a range of small-business tax concessions became available to all businesses with a small-business entity aggregated turnover threshold for a range of small-business concessions increased from $2 million to less than $10 million.

The $10 million aggregated turnover threshold applies to most of the small-business concessions, except for:

  • the small business income tax offset, which is available to businesses with aggregated threshold turnover of less than $5 million from 1 July 2016 (individual partners can claim this) and the offset increases to 8%, capped at $1,000

  • capital gains tax (CGT) concessions for small business continue to have an aggregated turnover threshold of $2 million.

The aggregated turnover threshold for the fringe benefits tax concessions increases to $10 million from 1 April 2017.

You must answer this question and re-affirm eligibility each year so that the net small business income can be calculated and the partners of the partnership receive their distribution share of the small-business entity partnership net income. Eligibility is also required so that small business entities may use the small-business simplified depreciation rules.

Accessing the worksheets

Press Enter at this question to open the Small Business Entity worksheet (sbe). The answer to both eligibility questions in the worksheet must be Y. Press Alt+S at question 2 to open the Small business entity aggregated turnover worksheet (sat). You can access the sbe worksheet from the depreciation worksheet (d) and if you have done so the eligibility question will already be answered.

CCH references

7-001 Concessions and tools for small business entities

7-210 - Small business income tax offset

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