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Regular Member
 
Group: Forum Members
Last Login: 27/07/2011 7:15:57 PM
Posts: 38,
Visits: 114
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Dear MYSF,
Last year when i had a tax loss MYSF handled it perfectly by allocating all the tax payable to my one member in accumulation and zero to my one member in pension phase. however this year i am getting a tax refund (from franking credits) and (maybe mistakenly) believe that the tax refund should be split between the members according to their percentage of the assets. when i do the year end roll over mysf allocates all the tax refund to the accumulation member. whilst i'm sure the accumulation member would appreciate this  , i don't think the pension member will  . how do i fix this? (the allocation that is not the unhappy member) 
Thanks
Kat
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MySF Administrator
Group: Administrators
Last Login: 29/01/2012 4:16:49 PM
Posts: 208,
Visits: 958
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Hello,
Could you please let us know how you entered the tax refund into the system and to what accounts?
We will also need some time to do some testing and acquire information from our financial advisors before we can provide assistance with this issue. We will reply to this forum post as soon as we have any information.
Best Regards,
MySF
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Regular Member
Group: Forum Members
Last Login: 27/07/2011 7:15:57 PM
Posts: 38,
Visits: 114
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Sorry - I should have been more specific. the tax refund is what the end of year roll over accounts calculate the fund will get back based on my entry of the franking credits paid on dividends less the amount of tax due on the accumulation member's percentage of the fund income from various cgt events (share sales). in the year end roll over accounts the refund is allocated totally to the accumulation member.
i've also sent an email to my accountant to confirm that my thinking is correct (ie refund should be split in accordance with each member's percentage share) as it occurred to me it might possibly be that the franking credits should be split proportionally and then the accumulated member gets her share of the franking credits credited against the income tax due on the taxable proportion of the fund.
i'll let you know when i get the answer but either way i'm positive the accumulation member doesn't get the benefit of 100% of the franking credits.
cheers
Kat
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Regular Member
Group: Forum Members
Last Login: 27/07/2011 7:15:57 PM
Posts: 38,
Visits: 114
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Dear MYSF,
I've received confirmation that, in my fund's circumstances, the imputation credits should be split between the members in the percentage of their holdings and any imputation credits due to the member in accumulation mode would be offset against the tax payable by that member. The allocated pension member's imputation credits should not be used to offset against or pay the tax due and payable by the accumulation member.
Look forward to hearing from you.
Cheers
Kat
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MySF Administrator
Group: Administrators
Last Login: 29/01/2012 4:16:49 PM
Posts: 208,
Visits: 958
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Hello,
We have also received an email from another customer outlining their concerns with this same issue.
We will be investigating this further and providing a fix to it if necessary in the form of a software update. We will post anything we find into this forum thread.
Thank you for letting us know if this problem.
Best Regards,
MySF
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Regular Member
Group: Forum Members
Last Login: 27/07/2011 7:15:57 PM
Posts: 38,
Visits: 114
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Dear MYSF
I noticed the last two updates don't appear to address this issue. Are you still working on it? My 2010 tax return is due by 31 October and it would be great if I could have it lodged on time this year.
Cheers
Kat
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MySF Administrator
Group: Administrators
Last Login: 29/01/2012 4:16:49 PM
Posts: 208,
Visits: 958
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Hello,
Sorry for not getting back to you but a software update is not needed for this as we may have found a work around.
The imputation credit income is actually already split between members (this is the bit that goes to the income account when you record a dividend). However the tax benefit of the income (the bit that is posted to a contra liability account when recording a dividend) is only allocated to accumulation mode members.
What you need to do is go to the 'Tax liability allocation' tab on the 'Allocation percentages' screen of the rollover. Here you will see that all members in pension mode have zero next to them. This will apply in cases where the fund is meant to pay money to the ATO and also when the fund is meant to receive a refund. Where the tax liability of the fund is negative (refund to come from ATO) because of imputation credits you can force the software to allocate some of that refund to pension members by increasing their allocation of tax from zero to something more.
Ideally, the software should know what the tax liability is and split it properly if negative, but this info appears later on in the rollover.
This allocation modification should only be performed if the net tax owing is negative, in other words, a refund is due to the fund. If the tax amount is positive then you should not do this because you would end up with the pension members paying tax.
Please let us know your comments as soon as you can.
Regards,
MySF
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Regular Member
Group: Forum Members
Last Login: 27/07/2011 7:15:57 PM
Posts: 38,
Visits: 114
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Dear MYSF
Thank you for the "answer" 
I am a bit concerned that it appears to deduct the tax payable by member 1 from the imputation credits available prior to splitting the tax refund between the 2 members but I'll follow your instructions and say a little prayer.
Cheers
Kat
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