Post on 06-Jul-2020
The Portfolio Service Personal Investment Plan
The Portfolio Service
Tax guide 2015
The Responsible Entity of The Portfolio Service Personal Investment Plan is Questor Financial Services Limited
ABN 33 078 662 718 AFSL No 240829.
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This guide has been prepared to help individual
Australian resident taxpayers complete their 2015
tax return.
To complete your tax return you will need the
following:
• a copy of the Personal Investment Plan (the Plan)
‘Consolidated taxation statement for the financial
year ended 30 June 2015’ (taxation statement)
• a copy of the Plan ‘Statement of capital gains
for the financial year ended 30 June 2015’
(CGT statement), where applicable
• copies of schedules from the Australian Taxation
Office (ATO):
— ‘Tax Return for Individual 2015’
— ‘Tax return for individuals (supplementary
section) 2015’
— ‘Individual tax return instructions 2015’
— ‘Individual tax return instructions supplement
2015’
— ‘Guide to capital gains tax 2015’ and ‘You
and your shares 2015’ if you have capital gain
amounts or received franking credits as part
of your distribution.
If you have received income from other investments
held outside the Plan, you will need to combine
the information from those investments with the
information we have provided.
Important information
This guide has been prepared by Questor
Financial Services Limited ABN 33 078 662 718
AFSL No 240829 (Questor/we) and contains general
information only. Questor is not a registered tax
agent and this information is not a substitute for any
instructions from the ATO. You should consider the
appropriateness of this information, having regard
to your individual circumstances. Australian taxation
laws are complex so we recommend you seek taxation
advice from a registered tax agent before making
any decision based on the information in this guide.
Although the information in this guide is believed
to be correct at the time of compilation, no warranty
as to the accuracy or reliability of the information
is given and no responsibility arising in any other way
for errors or omissions in the information is accepted
by Questor, its officers, employees and agents.
Your tax return and your statements
In your tax return, you must declare income that you
were entitled to during the period 1 July 2014 to 30
June 2015 (the financial year). This may not coincide
with the actual cash distribution you have received
during the same period.
Your ‘Annual reporting package 2015’ includes the
following statements and, where applicable, you need
to refer to them to complete your 2015 tax return.
1 The taxation statement summarises all of the
income entitlements on the investments held in the
Plan, the deductible amount of expenses paid from
the Plan as well as any relevant amounts of tax paid
and tax offsets for the financial year.
2 The CGT statement details all capital gains/losses
on the disposal of investments held in the Plan
during the financial year. You will only receive this
statement if you have disposed of investments.
3 The Gain and Loss derived on disposal or
redemption of traditional securities for financial
year ended 30 June 2015 details all revenue
gains/losses on the disposal of traditional securities
held in the Plan during the financial year. You will
only receive this statement if you have disposed
of investments.
All items required to complete your tax return are
detailed in ‘Part A: Summary of Tax Return’ of the
taxation statement.
For capital gains items, you are required to combine
the capital gains items detailed in ‘Part A: Summary
of Tax Return’ with the relevant amounts from the
‘Statement of Capital Gains for the financial year
ended 30 June 2015’.
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Understanding the components of your consolidated taxation statement
Part A — Summary of tax return
This section of your taxation statement highlights the
major components of your distribution. For investors
with straightforward circumstances, this information
should help you complete your tax return.
The tax return label reference in Part A relates
to the ‘Individual tax return 2015’ and ‘Tax return
for individual (supplementary section) 2015’.
The amounts shown in Part A of your taxation
statement should be included in your tax return
against the corresponding tax return labels.
A breakdown of the distribution components is shown
in Part C of your taxation statement.
1.Label10L—Grossinterest
This item represents the total interest income that
has been paid or credited to your account from direct
investments.
2.Label11S—Dividends—unfrankedamount
This item represents the total of unfranked dividends
that have been paid or credited to your account from
direct investments in Australian companies.
3.Label11T—Dividends—frankedamount
This item represents the total of franked dividends
that have been paid or credited to your account from
direct investments in Australian companies.
4.Label11U—Dividends—frankingcredit
This item represents the amount of franking credits
(including cents) attached to franked dividends from
direct investments in Australian companies.
Franking credits are Australian tax offsets that you
may be entitled to claim. Your entitlement to claim
franking credits as a tax offset against your Australian
tax liability is subject to you satisfying the ‘holding
period rule’. For further information on the holding
period rule, you should consult the ATO publication
‘You and your shares 2015’.
5.LabelD8—Dividenddeductions
This item represents all expenses incurred in respect
of deriving dividend income. It is included if you
received a listed investment company (LIC) capital
gain amount in respect of LIC dividends received
during the financial year. Where an LIC pays a dividend
that includes an LIC capital gain, you may be entitled
to an income tax deduction. This amount is detailed
in Part D of your taxation statement.
6.Label13U—Shareofnetincomefrom
trusts,lessnetcapitalgains,foreignincome
andfrankeddistributions
This item includes interest, unfranked dividends and
other income that have been paid or credited to your
account from your investment in Australian unit
trusts. It excludes capital gains, foreign income and
franked distributions which are shown separately on
your taxation statement.
7.Label13C—Frankeddistributions
fromtrusts
This item includes franked dividends, grossed up for
any franking credits that have been paid or credited
to your account from your investment in Australian
unit trusts.
8.Label13Y—Otherdeductionsrelating
todistributions
This item is the tax deductible expenses charged to
your account in the income tax year. These expenses
may be deducted against the distribution income you
received. If you have incurred additional deductible
expenses in relation to your distribution income,
these should also be disclosed at this label.
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9.Label13Q—Shareoffrankingcredit
fromfrankeddividends
This item includes your share of franking credits
(including cents) from trusts. Franking credits are
Australian tax offsets that are attached to franked
dividends from trust distributions you received. Your
entitlement to claim franking credits as a tax offset
against your Australian tax liability is subject to you
satisfying the ‘holding period rule’.
For further information on the holding period rule,
you should consult the ATO publication ‘You and your
shares 2015’.
10.Label13R—Creditfortaxfilenumber
(TFN)amountswithheldfrominterest,
dividendsandunittrustdistributions
This item represents the amount of tax withheld from
income (interest, dividends and unit trust distributions
paid or payable) received by the trust and/or the Plan
if you did not supply your TFN.
11.Label13A—Shareofcreditforamounts
withheldfromforeignresidentwithholding
This item includes amounts withheld from some
payments to specific recipients due to the operation
of the foreign resident withholding regime. The credits
may be in respect of Australian income you have
received as a foreign resident, or managed investment
trust withholding. As with other tax credits, the credits
for foreign resident amounts withheld may be offset
against your Australian tax liability on taxable income.
12.Label18H—Totalcurrentyearcapital
gains
This item is the total amount of capital gains before
any capital gains tax (CGT) discount has been applied.
This amount also includes foreign capital gains
(if applicable).
13.Label18A—Netcapitalgain
This item is the net capital gain distributed to you.
The items making up this amount are detailed in
Part B of your taxation statement.
Capital gains or losses derived from other sources
also need to be taken into account when completing
this label. If capital losses are to be applied to a
discount capital gain, ensure you offset these losses
against the gross capital gains first before applying
the CGT discount. The discount rate that has
been applied to your discount gains can be found
in the section ‘Capital gains information’ below,
with reference to your investor type.
Please refer to the ATO publication entitled ‘Guide
to capital gains tax 2015’ for further information.
14.Label19K—Foreignentities—CFCincome
This item applies to income and gains of foreign
companies for which you had a direct or indirect
controlling interest.
For more information on CFC (Controlled Foreign
Company) measures, please refer to the ATO
publication ‘Foreign income return form guide 2015’.
15.Label20E—Assessableforeignsource
income
This item is income from your overseas investments.
It comprises assessable foreign dividends, foreign
interest and all other assessable foreign income
(including foreign tax withheld on income not already
shown on your tax return) for which you are liable
to pay Australian income tax.
It excludes foreign net capital gains (which are to
be included at label 18).
If you have foreign income or losses from other
sources, you need to take these into account when
completing this label.
For further information, please refer to the
instructions in the ‘Individual tax return instructions
supplement 2015’.
The Portfolio Service
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16.Label20F—Australianfrankingcredits
fromaNewZealandfrankingcompany
This item is the franking credits arising from tax paid
in Australia by New Zealand franking companies. The
dividends, net of the Australian franking credits from
New Zealand franking companies, are included as part
of your foreign source income (per label 20E).
To check your eligibility to claim these Australian
franking credits from a New Zealand company,
please refer to the ATO publication ‘You and your
Shares 2015’.
17.Label20M—Othernetforeignsource
income
This item takes into account all foreign deductible
expenses incurred in earning foreign sourced income.
The sum of foreign deductions is to be subtracted
from your assessable foreign sourced income
(shown at label 20E) to arrive at your other net
foreign source income.
If you have no foreign income deductions, then
the amount included at label 20M is the same as
label 20E.
For further information, please refer to the
instructions in the ‘Individual tax return instructions
supplement 2015’.
18.Label20O—Foreignincometaxoffset
This item is your share of foreign income tax offset
(including cents). The foreign income tax offset
represents the amount of foreign income tax withheld
in another country on income received from foreign
investments.
If your foreign income tax offset from all sources
for the year is no more than $1,000, you can claim
this amount in full.
If you are claiming more than $1,000, you should
refer to the ATO publication ‘Guide to foreign income
tax offsets rules 2015’ to work out your entitlement.
Part B — CGT information amounts
This section of your taxation statement gives you a
detailed breakdown of capital gains that you received
from trust distributions.
CGT concession and tax deferred amounts may
not need to be included in your tax return. However,
these components may affect either the cost base
or reduced cost base of your investment and, in
some cases, may be required to be included in your
tax return.
For further information regarding the treatment
of these amounts, you should refer to the ATO
publication ‘Guide to capital gains tax 2015’.
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Part C — Income components
This section of your taxation statement gives you a detailed breakdown of your distribution income components and
capital gain/loss on the sale of your holdings relating to distributions.
To view expenses incurred for the current income year, refer to your Annual Report Fee Summary. The amounts
have been separated between deductible, non-deductible and unallocated as per matrix below.
Total deductible expenses have been included as ‘Other deductions relating to distribution’ (refer to item 8 on
page 3). Non-deductible expense has been included as part of the cost base of your assets. Where the fee has been
reported as unallocated, we have not made determination in relation to their deductibility or otherwise. Please
contact your tax adviser to discuss.
Deductible Non-deductible Unallocated
Managementcosts
Administration Fee x
Administration Fee Rebate x
Account Keeping Fee x
Closing Adjustment x
Advicefees
Advice Fees — On Going x
Advice Fees — Transfer x
Advice Fees — Transaction x
Advice Fees — Upfront x
Advice Fees — One Off x
Otherfeesandcosts
Transaction Fee x
Audit, Legal and Other Expenses x
The additional information in Part C of your taxation statement may be required to complete your tax return.
Part D — LIC capital gains information
A LIC is an Australian resident company, listed on
the Australian Securities Exchange, which carries
on the business of managing an investment portfolio.
LICs offer investors exposure to a diverse and
professionally managed portfolio of assets, similar
to those found in many unlisted managed funds.
Examples of assets may include Australian shares,
international shares and infrastructure assets.
To determine whether an investment is classified
as a LIC, investors should check the LIC classification
list which is published on the ASX website.
If a LIC pays a dividend to you that includes a LIC
capital gain amount, you may be entitled to an
income tax deduction.
You can claim a deduction if:
• you were an Australian resident when a LIC paid
you a dividend, and
• the dividend included a LIC capital gain amount.
A LIC paying a dividend will advise its shareholders
how much of the dividend is attributable to a LIC
capital gain (the attributable part).
An individual, trust or partnership can deduct
50 per cent of the attributable part advised by a LIC.
A complying superannuation entity, first home saver
account trust or life insurance company can deduct
33 1/3 per cent of the attributable part advised
by a LIC.
The Portfolio Service
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Exampleofconsolidatedtaxationstatementforthefinancialyearended30June2015
Part A: Summary of tax return
Amount Tax return label
Taxreturn
Gross interest $5,479.85 10L
Dividends — unfranked amount $1,378.11 11S
Dividends — franked amount $18,403.52 11T
Dividends — franking credits $12,357.93 11U
Dividend deductions $171.07 D8
Taxreturn(supplementarysection)
Share of net income from trusts, less capital gains, foreign income and franked distributions
$13,503.59 13U
Franked distributions from trusts $77.46 13C
Other deductions relating to distributions $8,558.55 13Y
Share of franking credit from franked dividends $49.80 13Q
Share of credit for tax file number amounts withheld from interest, dividends and unit trust distributions
$264.94 13R
Share of credit for amounts withheld from foreign resident withholding $930.98 13A
Total current year capital gains $492.29 18H
Net capital gain $351.96 18A
CFC income $33.20 19K
Assessable foreign source income $3,484.84 20E
Australian franking credits from a New Zealand franking company $332.97 20F
Other net foreign source income $3,484.84 20M
Foreign income tax offsets $2,216.05 20O
Part B: Capital gains tax information
Amount
Capital gains — discount method $280.66 (grossed up amount)
Capital gains — indexation method $113.43
Capital gains — other method $98.20
Totalcurrentyearcapitalgains $492.29
Capital gains tax (CGT) concession amount $276.28
Tax — deferred amounts $516.64
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Part C: Income components
Income and
expense
Tax paid and
offsets
Taxable
amount
Australianincome
Dividends — Franked (share) $18,403.52 $12,357.93 $30,761.45
Dividends — Franked (trust) $27.66 $49.80 $77.46
Dividends — Unfranked (share) $1,340.76 $1,340.76
Dividends — Unfranked (fixed interest) $0.00 $0.00
Dividends — Unfranked (trust) $18.46 $18.46
Dividends — Unfranked CFI $37.35 $37.35
Interest (fixed interest) $5,479.85 $5,479.85
Interest (trust) $1,791.14 $1,791.14
Interest not subject to NRWT $31.81 $31.81
Other income $11,397.24 $11,397.24
TFN Tax Deducted $264.94 $264.94
TotalAustralianincome $38,527.79 $12,672.67 $51,200.46
Capitalgains
Discounted method (TARP) $42.88 $42.88
Discounted method (NTARP) $97.45 $97.45
Indexation method (TARP) $33.20 $33.20
Indexation method (NTARP) $80.23 $80.23
Other method (TARP) $27.66 $27.66
Other method (NTARP) $70.54 $70.54
Totalcurrentyearcapitalgains $351.96 $351.96
Foreignincome
Foreign source income $1,268.79 $2,216.05 $3,484.84
Attributed CFC income $33.20 $33.20
Australian franking credits from NZ company $0.00 $332.97 $332.97
Assessableforeignsourceincome $1,301.99 $2,549.02 $3,851.01
Othernon-assessableamounts
Tax-exempt $15.37
Tax-free $59.02
Tax-deferred $516.64
CGT concession amount $276.28
Totalnon-assessableamounts $867.31
Totaldistribution $41,049.05 $15,221.69 $55,403.43
Less TFN amounts withheld $0.00
Less Non-resident withholding tax $930.98
Netcashdistribution $40,118.07
Otherdeductions
Other deductions relating to distributions $8,558.55
LIC deductions $171.07
Part D: LIC capital gains information amount
Amount
Attributable part of dividend $342.14
The Portfolio Service
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Capital gains information
To determine the total current year capital gains and net capital gain amounts which you are required to disclose
in your tax return, you need to combine the capital gains items detailed in the taxation statement with the relevant
amounts from the CGT statement.
For general information on capital gains, you may need to refer to the ATO publication ‘Guide to capital gains tax 2015’.
The following table summarises the types of capital gains details in both the taxation and CGT statements.
Capital gain/(loss)
calculation method
Relevant section
of your statement
Description
Othercapitalgain Nominal gain/(loss) These gains relate to assets held for less than 12 months which were not eligible to apply the indexation method. The entire amount of the gain is taxable.
Discountedcapitalgain
Nominal gain/(loss) These are capital gains that relate to assets that have been held for longer than 12 months and, accordingly, are eligible for the CGT discount. This amount represents the grossed up nominal gain or loss you have made on the redemptions of investments held for greater than 12 months. The entire amount of the gain has been distributed to you. Nominal gains are eligible for the discount method after the application of any current or carried forward capital losses. For an Australian resident individual, the appropriate discount factor to apply is 50 per cent. For other CGT discount rates, please see the ‘Understanding the components of your CGT Statement’ section in this guide.
Indexedcapitalgain Frozen Indexed Gain
These are capital gains that are eligible to apply the indexation method. The capital gains amount shown here has been indexed accordingly.
TARPandNTARP For Australian resident investors, the split between Taxable Australian Real Property (TARP) and non-TARP (NTARP) capital gains can be disregarded for the purposes of completing your tax return.
The split of the capital gains between TARP and NTARP is only relevant for non-resident investors who generally only pay Australian tax on TARP capital gains.
If you are a foreign resident investor, you may be entitled to an exemption from CGT on capital gains derived from assets that are classed as NTARP.
Please note that the law has been amended to remove or reduce the CGT discount on capital gains made after
8 May 2012 by non-resident individuals. Please refer to the ATO publication ‘Guide to capital gains tax 2015’ for
further information. We suggest that you seek professional taxation advice regarding the application of the CGT
regime to your own individual circumstances.
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Understanding the components of your CGT statement
For each investment sale recorded on the CGT
statement, it is possible to have an amount in either
the nominal gain/(loss) column or the frozen indexed
gain column or both. Where an amount appears in the
nominal gain/(loss) or frozen indexed gain column, this
is the amount that needs to be used in respect of that
particular investment sale in determining your overall
capital gains position. Where an amount appears
in both the Nominal gain/(loss) and Frozen indexed
gain columns, you need to make a choice as to which
amount you select, depending on your individual
circumstances.
Once an amount has been selected in respect of
each investment sale, you need to add these amounts
along with the total current year capital gains
from trust distributions (taken from your taxation
statement) and any other capital gains you have made
during the year. This amount needs to be disclosed at
tax return label 18H.
You then need to determine the net capital gain.
If you have selected any amounts from column
Nominal gain/(loss) and have no capital losses, you
need to apply the appropriate discount rate to these
amounts in determining your net capital gain. Where
you have a capital loss (either from the current year
or prior years), these need to be applied first before
discounting any capital gains. The net capital gain
from all sources needs to be disclosed at tax return
label 18A.
Note: If you have any prior or current year capital
losses, we recommend that you seek professional
taxation advice as to how you apply them.
Assumptions
In calculating the net capital gain or loss on your
redemption of investments, we have made the
following assumptions:
• The first parcel of investments you redeemed
was all or part of the first parcel of investments
purchased. This is referred to as the first in,
first out method.
• The application for your initial investment was
made with cash or a cash equivalent.
• The CGT provisions apply to you.
• You have a financial year end for Australian
income tax purposes.
If any of these assumptions do not apply to your
investment, then the calculation of the net capital
gain or loss on the redemption of your investments
disclosed on the CGT statement may not be
appropriate. Again, you should seek professional
taxation advice.
CGTdiscountrates
The table below lists the discount rates used to
calculate your discounted capital gains according
to your entity type:
Entity Discount rate %
Company 0.00
Individual 50.00
Partnership 50.00
Superannuationfund 33.33
Trust 50.00
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Capital gains taxation information statement
Examplesofstatementofcapitalgainsforthefinancialyearended30June2015
Investment Date sold Date of
purchase
Units sold Sale
proceeds
Adjusted
cost base
Nominal
gain/(loss)
Frozen
indexed
gain
Investmentoption1
30/11/2014 3/03/2009 150 $900.00 $425.00 $475.00 $475.00
Investmentoption2
12/04/2015 6/06/1996 845 $10,000.00 $7,000.00 $3,000.00 $2,790.00
Investmentoption3
18/01/2015 20/12/2001 745 $8,500.00 $6,250.00 $2,250.00 $2,250.00
Investmentoption4
2/07/2014 1/08/1995 4,000 $7,250.00 $10,475.00 $(3,225.00) —
We have used the figures from the sample statement of capital gains for the financial year ended 30 June 2015
shown above and the sample Personal Investment Plan consolidated taxation statement on pages 7 and 8 of this
guide to illustrate how to calculate net capital gains.
We have assumed that there are no net capital losses carried forward from previous years. This is a guide only
and may not be applicable to your personal circumstances. You should seek professional taxation advice.
The sample statement of capital gains for the financial year ended 30 June 2015 shows that the client has incurred
a capital loss of $3,225.00 on the disposal of investment option 4. Capital losses may be offset against capital
gains, such as trust distributions of capital gains and/or arising from the disposal of units/shares, in the order that
minimises your overall net capital gain.
Please note that the sequence in which capital losses have been offset in this example may not necessarily be
suitable in your circumstances.
Traditional Securities Information
The below information is only applicable to Australian residents who are not subject to the ‘Taxation of Financial
Arrangement (TOFA) rules’. Holders who are subject to TOFA should seek their own professional taxation advice.
A traditional security is, broadly, a security that is not issued at a discount of more than 1.5 per cent, does not
bear deferred interest or is not capital indexed. A traditional security may be, for example, a bond, a debenture,
a deposit with a financial institution or a secured or unsecured loan. Shares and units in unit trusts are not
traditional securities.
If an Australian resident disposes of or transfers their traditional securities and the proceeds from their disposal
exceed their cost, the resulting gain will generally be assessable income in the financial year in which the disposal
or redemption takes place. This gain will be taxed as ordinary income and will not be a capital gain. Consequently,
the Australian resident may not be entitled to apply the capital gains discount in respect of the gain and may not
be entitled to apply any capital losses against the gain.
Conversely, if the proceeds of disposal are less than the cost of the traditional securities, the resulting loss may
be an allowable deductible in the financial year in which the disposal or redemption takes place.
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