Practitioner EditionPractitioner Edition: End of Year processing

11.3.1 Year End Processing: Calculate Tax – Trust Distributions

On this screen, you will need to record the tax components of any trust income received during the year from your listed / unlisted trusts and managed funds.

This information can be obtained from the annual tax statements provided by the various entities in which your Fund held investments during the year.

Every cash distribution and distribution reinvestment recorded in Mclowd’s Income Tab, must have a corresponding entry on the Trust Distribution screen in order for that income to be taxed correctly.


Click the TRUST DISTRIBUTIONS button to begin. Mclowd displays:

Trust Distributions Table

Click ADD ROW to insert a row in which to enter data.

Click the ˅ in the Investment Name column to drop down a selection list of your Fund’s investments.

Trust Distributions Selections

Mclowd displays a list of those of your Fund’s investments that require Trust Distribution entries. Select an investment.

Trust Distributions selection list

It is important to complete this step correctly, entering all relevant data as shown on Annual Tax Statements issued by each of the relevant entities in which your Fund has invested. Correctly completing the Trust Distributions Table ensures that the correct tax is applied to income from Managed Funds, Unit Trusts, etc. and all tax credits are correctly claimed, ensuring your fund pays the correct amount of tax on the income received from these investments.

Fill in the data by referring to the Annual Tax Statement supplied by the selected Fund or Trust. Refer to the table below for guidance.

Click ADD ROW at bottom left of the window to add additional rows, selecting each displayed entity, one by one, and entering the relevant data.Trust distributions


NOTE:  As the format of statements supplied by different funds and trusts varies, it may be difficult to correctly interpret the data and match information to the columns in Mclowd. Mclowd developers have endeavoured to label columns to make the process as intuitive as possible, but trustees may need professional assistance to ensure this form is correctly completed. Mclowd offers a low-cost service to Trustees who need assistance with this process.

Be aware that errors or omissions in completing this table may result in an incorrect calculation of your Fund’s tax liability, causing you to overpay or to understate your Fund’s taxable income.

The following is a broad guide only, to assist Mclowd users to understand how tax is calculated on Trust Distributions and to verify that they are reporting all income and claiming tax credits appropriately.


Mclowd requires you to insert figures in columns A through J and in column M. The following table provides details of data required in each column.

Column Label Data to enter
A Australian Taxable Income net of tax
(Note that your statement may itemise income from various sources, requiring you to add the amounts)Annual Tax Statements may indicate Tax Return Label 11S, 11T, 13C, 13U, 13R, or 13Y next to amounts that should be included here.
B Imputed credits (may be labelled ‘’Franking Credits’’ on statements)
Annual Tax Statements may indicate Tax Return Label 11U or 13Q next to amounts that should be included here
C TFN credits (credits for tax deducted where tax file number was not held on file)
Annual Tax Statements may indicate Tax Return Label 13R next to amounts that should be included here.
D Foreign income net of tax –
Annual Tax Statements may indicate Tax Return Label 20E, 20M or 20R next to amounts that should be included here
E Tax free income      Annual Tax Statements generally clearly indicate tax free income, if any, but do not provide a corresponding Tax Return Label but do not provide a corresponding Tax Return Label. The exception is where a CGT concessional amount is shown on a statement. In this case, refer to Calculating Tax Free Capital Gains Income in Understanding Capital Gains.
F Tax exempt income    Annual Tax Statements generally clearly indicate tax exempt income, if any, but do not provide a corresponding Tax Return Label
G Tax deferred income .   Annual Tax Statements generally clearly indicate tax exempt income, if any, but do not provide a corresponding Tax Return Label
H Indexed capital gains   –  * refer to Understanding Capital Gains
I Discounted capital gains  – * refer to Understanding Capital Gains.  Annual Tax Statements should indicate Tax Return Label 18H for grossed up gains and 18A for net capital gains. Any figure labelled 18A needs to be grossed up (multiplied by 2)
J Other capital gains –  * refer to Understanding Capital Gains
M Foreign Tax Credits   Annual Tax Statements may indicate Tax Return Label 20 O next to amounts that should be included here

Mclowd will add and display totals in columns K (Total Income – cash distributions) and L (gross distributions).

Look carefully at the statement provided to you by the Fund or Trust. You may need to scan down or check additional pages for correct detailed figures. Some entities provide detailed notes to assist interpretation of statements. You may find helpful notes on entity websites (e.g. AMP Capital provides a detailed explanation at http://www.ampcapital.com.au/AMPCapitalAU/media/contents/Documents/NMFM-TaxStatementGuide_110613.pdf

Working Examples:

 

NEXT: 11.2.2 CAPITAL GAINS


about the author:

Lorraine Cobcroft

With a background in accounting and financial management, followed by two decades writing software documentation, Lorraine joined the Mclowd team in mid-2016 and is enjoying working with a dynamic team to enhance an innovative product that has the potential to revolutionize the way Australians manage their retirement funding. Lorraine is also an accomplished business writer, ghost-writer, novelist and short-story writer and poet.

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