BGL do not provide accounting or taxation advice. The following is designed to act as a guide for Simple Fund 360 users. It is not designed to be accounting or tax advice and should not be taken as a strict guideline. Other methods that are more suitable may be used instead of these steps.
A traditional security such as a bond, bills of exchange and promissory notes are supported by Simple Fund 360.
Please Note: shares in companies and units in managed funds are generally not traditional securities.
Purchase in Simple Fund 360
Traditional Securities can be set up as an investment under the following control account 72000 - Debt Securities (Bonds, Bills of Exchange, Promissory Notes)
To create an investment in Simple Fund 360, check out the help.
When creating the Investment if the asset is not Subject to CGT uncheck this option in the Chart of Accounts.
Navigate to the Chart Of Accounts » Edit on the Investment » More Details »uncheck Asset subject to CGT
How are the Gains or Losses treated
Generally gains on traditional securities are taxed as ordinary income (s.26BB of ITAA 1936). Gains are treated as the difference between the payment received on disposal less the cost of the security. Gains or losses made are not usually treated as a capital gain or loss no discount or indexation will be applied.
A loss on the disposal of a traditional security is deductible in the income year in which the disposal or redemption takes place, provided the loss was incurred in the normal course of trading on a securities market.
Company Redeems a Bond
When the investment is no longer held by the fund, record a disposal at cost.
Recording the Profit
To record the profit made, create a new income account (e.g. Account 26500/InvestmentCode). Ensure that it is also linked to the investment. Refer to the help on how to create Linked Accounts.
Record the profit from the Transaction List using Bank Statement.
The Tax Return Label needs to be set to Income - Other Income.
Recording The Loss
To record the loss, create a new expense account. Refer to the help on how to create a new expense account.
You can also select a control account when creating this new expense account, which you can then link to the investment. Refer to help on how to create Linked Accounts.
Record the Loss from the Transaction List using Bank Statement
The Tax Return Label will need to be set to Expenses - Other.
|From the Main Toolbar navigate to the Compliance menu.
|Select Tax compliance.
To review the tax return:
- Select Section B Income - The gains derived on the disposal of Traditional Securities will be classified as Other Income under Section B Income, Label S Other Income. Please review the Code for correctness.
- Select Section C Expenses - The losses incurred on the disposal of Traditional Securities will be classified as Other Deductions under Section C Deductions, Other amounts. Please review the Code for correctness.
Recording the Interest
Any interest applicable can be recorded to the linked income Account 25000/InvestmentCode.