When posting a transaction with tax deferred/tax free amounts I receive the following message:
"This transaction contains tax deferred/tax free/AMIT cost base adjustment components that will affect disposals that have occurred in the current/future years. The system will re-process these disposals automatically. Note: Capital gains will be affected. Disposals processed during a create entries period will not be adjusted."
After clicking continue, existing disposals relating to this investment then change displaying a description similar to the following:
This message will appear if you are trying to post tax deferred, AMIT or tax free amounts to an investment that has disposals recorded in the current financial year or future periods.
Selecting Continue will re-process these disposals and include the tax deferred/tax free amounts in the revised disposal calculations. Any past disposals within a prior financial year or prior create entries period will not be adjusted.
If you select Cancel the distribution will be recorded, but the tax deferred and free amounts will not be included and the disposals will not be re-processed.
Disposals during the year
For investments that have parcels disposed of during the year, any tax deferred amounts input at year end will be included in an automatic re-processing of disposals when recorded.
This process is in line with the ATO Requirements:
Generally, you make any adjustment to the cost base and reduced cost base of your unit or trust interest at the end of the income year. However, if some other CGT event happens to the unit or trust interest during the year (for example, you sell your units), you must adjust the cost base and reduced cost base just before the time of that CGT event. The amount of the adjustment is based on the amount of non-assessable payments to you up to the date of sale. You use the adjusted cost base and reduced cost base to work out your capital gain or loss.