Due to tax and accounting differences, taxable distribution may be higher than net cash distribution in a financial year. This article provides a solution as to how to process the transaction.
Please note BGL does not provide tax advice. Users may find other options that suit better.
In this example, there is a capital loss of $1,000 carried forward in a trust distribution from last financial year, which is not deductible in the fund, thereby resulting in a higher taxable distribution than net cash received.
1. To enter a distribution transaction, navigate to and select Transaction List. Select Bank Statements from New Transaction.
2. Enter the amount accordingly for Bank account and Distribution (23800) account for the security, using the net receipt amount. Then select More to input further tax details.
3. Locate the Non-Cash Capital Gains/ Losses section at the bottom of the More Details panel. Leave Capital Losses blank for the non-deductible components, provided there are no other capital losses to be claimed as deductible. Select Post to finalise the transaction and this amount would not be claimed in the tax return,
1. The system does NOT allow a negative figure to be entered for Other Non-Assessable Amounts (including Tax Exempted, Tax Free and Tax Deferred Amounts).
2. The system allows where the net cash distribution amount in the more detail panel is different from the amount recorded in the accounting journal.
The information from the more detail panel will be used for tax purpose. (e.g. SMSF Tax Return);
Whereas the amount recorded in the journal will be used for accounting purpose. (e.g. Operating Statement)
Also check article Distributions and Tax Components