Overview

CMN.ATO.SMSFAR.437136: Gross payments subject to foreign resident withholding (excluding capital gains) amount required. - If there is an amount greater than zero at 'Credit for tax withheld - foreign resident withholding (excluding capital gains)', then there must be an amount at 'Gross distributions from partnerships', 'Gross distributions from trusts' or 'Other income'. 

Tax Treatment

Following the instructions below will result in the amount at H2 being non-refundable.

Please refer to the article below for the ATO's response on the situation where in the same income year an SMSF has both:

• Credit for tax withheld – foreign resident withholding and; 
• Exempt current pension income (ECPI) 

CMN.ATO.SMSFAR.436332

Solution

This error is generated when there is an exempt pension income and there is an amount showing under H2 in the fund's annual return.

From Section D, ensure the H2 amount has been moved to C1 you will now be able to validate.