The tax return for individuals supplementary section is where Australian residents report income and claims that don’t fit on the standard four-page return: partnership and trust distributions, capital gains, foreign income, and a range of extra deductions and offsets. The Australian Taxation Office (ATO) organises it into groups A through F, each covering a distinct category. If you sold shares or property, received a distribution statement, earned money overseas, or need to claim an offset that isn’t on the main form, at least one of these groups applies to you.
When You Need the Supplement
You need the supplement whenever your finances go beyond salary, wages, and simple interest or dividends. The usual triggers are a distribution from a trust or partnership, the sale of a capital asset, foreign source income, or deductions and offsets that aren’t on the standard return. If you lodge through myTax, the system prompts you to add supplementary items when your pre-fill data includes partnership or trust distributions, managed fund dividends, or share sale proceeds.1Australian Taxation Office. Pre-fill availability
Pre-fill covers a lot of ground, including employer income, interest, dividends, share transactions, government payments, and some partnership and trust distributions. It isn’t always complete or correct. Cross-check pre-filled figures against your own records, particularly distribution statements from trusts and managed funds, which sometimes arrive after the ATO’s data-matching cut-off.
Partnership and Trust Income at Item 13
Groups A and B capture your share of income or losses from partnerships and trusts under Divisions 5 and 6 of the Income Tax Assessment Act 1936. The form splits these into primary production and non-primary production because primary production income has its own treatment, including averaging over multiple years.2Australian Taxation Office. PS LA 2010/1 – Approach to cases involving Division 6 (trust income) of the Income Tax Assessment Act 1936
At item 13, partnership income goes at label N (primary production) and label O (non-primary production). Trust income goes at labels L and U. Franked distributions from trusts sit at label C along with the attached franking credits, while your total share of franking credit entitlements is recorded at label Q.3Australian Taxation Office. 13 Partnerships and trusts 2025
One detail catches people out: if your trust distribution includes a capital gain, that portion goes at item 18, not item 13. A good distribution statement separates the components. If yours doesn’t, or arrives late, contact the trustee before lodging. Putting a capital gain at item 13 can create a double-counting problem that triggers an ATO review.
Deductions relating to partnership and trust income sit within item 13 too. Primary production deductions for landcare, water facilities, fencing, and fodder storage go at labels I and X. Non-primary production deductions go at labels J and Y. You then work out a net primary production amount and a net non-primary production amount, carrying any loss forward if needed.
Capital Gains at Item 18
Group C covers the disposal of capital assets: investment properties, shares, collectibles, cryptocurrency, and similar holdings. Capital gains tax is governed by Parts 3-1 and 3-3 of the Income Tax Assessment Act 1997.4Australian Tax Office. TD 97/3A1 – Addendum
At item 18, label H, you enter your total current year capital gains before applying any losses, discounts, or small business concessions. This is the gross figure. You then work through a set sequence: apply current-year capital losses, apply any unapplied net capital losses carried forward from earlier years, and only then apply the CGT discount.5Australian Taxation Office. 18 Capital gains 2025
The 50 Percent Discount
If you held an asset for at least 12 months before selling, you can reduce the remaining capital gain by 50 percent under Division 115 of the Income Tax Assessment Act 1997. The discount applies after you’ve offset all available capital losses, and that sequencing changes the final number.6Australian Taxation Office. 18 Capital gains 2026
The discount isn’t available if you use the indexation method for assets acquired before 21 September 1999. It may be reduced or unavailable if you were a foreign or temporary resident, or if you had a period of non-residency after 8 May 2012.
When Your Home Is Involved
Selling your home does not automatically mean CGT is payable. The main residence is exempt if you are an Australian resident, the property was your home for the entire ownership period, was not used to produce income, and sits on land of two hectares or less. Meet all three conditions and you ignore the gain entirely.7Australian Taxation Office. Eligibility for main residence exemption
If you don’t meet every condition (perhaps you rented the property out for a period or ran a business from a home office), a partial exemption may still apply. Non-residents at the time of sale generally cannot claim any main residence exemption, with narrow exceptions for life events such as terminal illness, death of a spouse or dependent child, or relationship breakdown.
Foreign Income at Item 20
Group D exists because Australian residents owe tax on worldwide income. Section 6-5 of the Income Tax Assessment Act 1997 is explicit: an Australian resident’s assessable income includes ordinary income from all sources, whether in or out of Australia.8Australasian Legal Information Institute. Income Tax Assessment Act 1997 – SECT 6.5 – Income according to ordinary concepts (ordinary income)
At item 20, label E captures your total assessable foreign source income: overseas employment income, foreign pensions, rental income from overseas property, and foreign investment earnings. If you paid tax to a foreign government on that income, the foreign income tax offset goes at label O. For offsets of $1,000 or less, you simply claim the amount of foreign tax paid. For offsets above $1,000, you must calculate a foreign income tax offset limit to determine how much you can claim.9Australian Taxation Office. 20 Foreign source income and foreign assets or property 2025
Label P asks whether your overseas assets total A$50,000 or more. It’s a disclosure question, not a separate tax. Skipping it or answering incorrectly is a red flag for ATO data matching.
Currency Conversion
Foreign income, deductions, and taxes paid must be converted to Australian dollars before entering them on the return. The ATO requires the exchange rate prevailing at the time of the transaction, or an average rate. Since January 2020, the ATO has used Reserve Bank of Australia exchange rates as its reference. If your currency isn’t listed by the RBA, you can use any reasonable externally sourced rate, but keep a record of the rate and where you found it.10Australian Taxation Office. Foreign exchange rates
Deductions and Offsets in Groups E and F
Groups E and F round out the supplement with deductions at items D11 through D15 and tax offsets at items T3 through T9. These cover expenses and credits not on the standard return, including deductions for managing tax affairs, certain capital works, and specific offsets such as the seniors and pensioners tax offset and the net medical expenses tax offset (for disability aids claims that remain available).11Australian Taxation Office. Individual Supplementary Tax Return and Instructions 2025
How the Medicare Levy Interacts
The Medicare levy is 2 percent of taxable income for 2025–26 and sits on top of your income tax. It’s calculated as part of the overall return, but supplementary income (trust distributions, foreign earnings, capital gains) all feeds into the taxable income figure the levy is calculated on.12Australian Taxation Office. Tax rates – Australian resident
The Medicare levy surcharge is separate. It applies if you don’t hold an appropriate level of private hospital cover and your income exceeds set thresholds. For 2025–26, the surcharge does not apply below $101,000 for singles or $202,000 for families (plus $1,500 for each dependent child after the first). Above those thresholds, the rate is 1 percent, 1.25 percent, or 1.5 percent depending on income tier. The surcharge is calculated on taxable income, reportable fringe benefits, and any amount on which family trust distribution tax was paid.13Australian Taxation Office. Paying the Medicare levy surcharge
Lodging and Deadlines
Most taxpayers lodge online through myTax, which requires a myGov account linked to the ATO. After signing in, select “Manage tax returns” from the quick links, and myTax walks you through each section, pre-filling data received from employers, banks, health funds, and other third parties. It prompts you to add supplementary items where your data suggests they’re needed. Once you review all entries, myTax calculates your estimated tax position before you lodge. Save the confirmation receipt as proof of lodgment. Online returns typically produce a notice of assessment within two weeks.14Australian Taxation Office. Your notice of assessment
Paper returns take up to 50 business days (roughly 10 weeks) to process and may not appear on ATO systems for up to seven weeks after posting.15Australian Taxation Office. Lodge a paper tax return
If you lodge your own return, the deadline is 31 October following the end of the income year.16Australian Taxation Office. Income tax return Using a registered tax agent gives you significantly more time. For the 2025–26 income year, most individuals lodging through an agent have until 15 May 2026, with a concessional extension to 5 June 2026 provided any payment due is also made by that date. The exception is clients with prior-year returns still outstanding, who must lodge by 31 October regardless.17Australian Taxation Office. Individuals and trusts
Records You Need to Keep
You must keep written evidence supporting your return for five years from the date you lodge. That covers distribution statements from trusts and partnerships, purchase and sale contracts for capital assets, receipts for deductible expenses, and records of foreign tax paid.18Australian Taxation Office. Records you need to keep
CGT assets have a longer rule. You must keep records for five years after it’s certain that no CGT event can happen in relation to the asset. In practice, hold onto purchase records for as long as you own the asset, plus five years after disposal. In a dispute with the ATO, records must be kept for five years from when the dispute is resolved, even if that runs beyond the normal window.
For small expenses where you can’t get a receipt, you can keep a diary note or phone note as long as the total claim for such expenses is $200 or less for the income year. The note must include the supplier, amount, nature of the expense, and dates, and it needs to be made as soon as possible after you incur the cost.
Penalties for Errors or Late Lodgment
Getting the supplement wrong carries real financial consequences. Under Division 284 of Schedule 1 to the Taxation Administration Act 1953, the ATO can impose administrative penalties based on the degree of fault: 25 percent of the shortfall for failing to take reasonable care, 50 percent for recklessness, and 75 percent for intentional disregard of the law. Interest charges accrue on top of any unpaid tax from the original due date.
The ATO can reduce these penalties if you voluntarily disclose an error before an audit begins, or increase them if you obstruct an investigation. The distinction between a lack of reasonable care and recklessness often turns on whether you made a genuine attempt to get things right. Clear records and close attention to the form instructions is the most practical protection, not because it guarantees you’ll avoid errors, but because it demonstrates the reasonable care that keeps penalties at the lower end or eliminates them entirely.19Australian Taxation Office. Overview of record-keeping rules for business