Guide to your 2017 Tax Statement

Transcription

1 Guide to your 2017 Tax Statement Macquarie Specialist Investments Macquarie Flexi 100 Trust - ARSN macquarie.com

2 2 Guide to your 2017 Tax Statement

3 Who should use this guide? This guide has been prepared to assist you in completing your 2017 income tax return and supplementary section if you have an investment listed in the appendix (Macquarie Asset Management Product). Please note that this guide may not include references to all sections of the 2017 income tax return and supplementary section that may be relevant to your investment in a Macquarie Asset Management Product. Please refer to your tax statement for more information on which sections of the 2017 income tax return and supplementary section may be relevant to your investment. The information in this guide is based on laws in force and administrative practices generally accepted as at the date of its preparation and is subject to change without notice. These laws and administrative practices may change in the future (and possibly with retrospective application) and may affect the tax treatment of your investment. This guide should not be relied upon as a substitute for professional tax advice. The following information assumes 1. You are an Australian resident, individual taxpayer; and 2. Your investment qualifies as a capital investment for tax purposes. You will need to combine the figures from your Macquarie tax statement (Tax Statement) with any income or deductions from your other investments when completing your 2017 income tax return. The amounts shown in your Tax Statement are based on the assumptions outlined in this guide. Please make sure these assumptions are correct for your circumstances before you include this information in your 2017 income tax return. You should not use this guide if your investment is held by a company, superannuation fund or partnership. Contact your accountant or tax adviser for help in completing an income tax return for the relevant entity. If you have any doubt about the taxation position of your investment, or want more information about your personal taxation situation, we suggest you seek professional tax advice. The purpose of this guide This guide will help you complete the 2017 Individual tax return and the 2017 Individual tax return supplement. You will have received a Tax Statement for the year ended 30 June 2017 for each of the Macquarie Asset Management Products in which you have invested. Your Tax Statement is a record of the income you received from your Macquarie Asset Management Product(s) and any capital gain distributed from the trusts. For some Macquarie Asset Management Products, the Tax Statement will also include information on the interest paid with respect to loans taken out to fund your investment. For all Macquarie Asset Management Products you will receive a separate statement in relation to the capital gains tax event on redemption or sale of your units (Capital Gains Tax Statement). Once your Individual tax return instructions supplement has been completed you will need to transfer the Total Supplement Income or Loss amount to Label I on page 3 of the 2017 income tax return form. When using this guide please refer to your individual Tax Statements and Capital Gains Tax Statements (where applicable). In some circumstances you may also need to refer to your transaction statement. The amounts from the individual Tax Statement and Capital Gains Tax Statement (where applicable) that must be included in your income tax return are explained in more detail in the following pages of this guide. Guide to your 2017 Tax Statement 1

4 Australian trust income Trust distribution Item 13 on your income tax return supplementary section Australian trust income is income received through a trust on investments situated in Australia, whether in shares in a company, units in a unit trust, bank deposits or other income producing investments. Net capital gains and foreign income are not included in Australian trust income, but are included in other parts of your income tax return. Step 1 If on any of your individual Tax Statements there is a total amount in the Part A entry Non-Primary Production Income that is identified with the label 13U, then that amount is your non-primary production trust distribution from that particular Macquarie Asset Management Product. Take the amount of non-primary production trust income identified in each individual Tax Statement with the label 13U and add together to determine the total amount of non-primary production trust income from your Macquarie Asset Management Products. Add to this any other amounts for non-primary production trust income you have received from other trust investments. Step 2 Enter the amount from step 1 at Item 13, label U (shown below). Step 3 Add together any deductions you can claim (if any) in relation to the total non-primary production income (your answer at step 2) and enter the total deductions at Item 13, label Y (shown below). Step 4 Subtract the amount at step 3 from the amount at step 2. Enter this amount in the Net non-primary production distribution box at Item 13 (shown below). If the amount is negative write L in the Loss box to the right of this figure. 2 Guide to your 2017 Tax Statement

5 Franking credits Trust distribution Item 13 on your income tax return supplementary section Franking credits received through a trust are tax credits for tax paid by a company on its earnings that it has distributed to the trust. The company distributes dividends to shareholders from its after-tax profit. Although you may have received an after-tax dividend, your income statement will still show the gross amount (shown under Amount ), but may be accompanied by a credit, representing the tax which has already been paid by the company. Step 1 If, on any of your individual Tax Statements there is an amount in the Part A entry Franking Credits that is identified with the label 13Q, then that amount is your franking credits from that particular Macquarie Asset Management Product. Take the amount of franking credits identified in each individual Tax Statement with the label 13Q and add together to determine the total amount of franking credits from your Macquarie Asset Management Products. Add this amount to any other relevant franking credits you have received from other partnership and trust investments. Step 2 Enter the total amount from step 1 at Item 13, label Q (shown below). Once your total 2017 personal tax liability has been calculated, the amount of the credit will be subtracted from this amount. Franking credits can only be used to offset your tax liability in the year in which they are received. Franking credits that you did not use to offset your tax liability (if any) may be refunded by the Australian Taxation Office (ATO) when you lodge your income tax return. Guide to your 2017 Tax Statement 3

6 TFN withholding tax TFN withholding tax Item 13 on your income tax return supplementary section When you first invested in a Macquarie Asset Management Product you were asked to provide your tax file number (TFN). If you chose not to do so, the Responsible Entity is required to deduct TFN withholding tax at the rate of 49% from distributions of income made to you. Step 1 If, on any of your individual Tax Statements there is an amount in the Part A entry Credit for TFN amounts withheld that is identified with the label 13R, then that amount is your TFN withholding credit for that particular Macquarie Asset Management Product. Take the amount of TFN withholding credits identified in each individual Tax Statement with the label 13R and add together to determine the total amount of TFN withholding credits from your Macquarie Asset Management Products. Add this amount to any other TFN withholding amounts deducted from any other investments. Step 2 Enter the amount from step 1 at Item 13, label R (see below). TFN withholding tax is able to be offset against your total 2017 tax liability in respect of your taxable income. In circumstances where the TFN withholding tax exceeds your tax liability, you are entitled to a refund of that excess tax. 4 Guide to your 2017 Tax Statement

7 Foreign income Foreign source income Item 20 on your income tax return supplementary section As an Australian resident taxpayer, you are liable to pay Australian income tax on income earned from overseas investments held either directly by you or by a unit trust in which you are invested. This foreign income may include any foreign income tax offsets that have been distributed which must also be included as part of your income. Step 1 If, on any of your individual Tax Statements there is an amount in the Part A entry Assessable foreign source income that is identified with the label 20E, then that amount represents foreign income that has been distributed to you from that particular Macquarie Asset Management Product. Take the amount of foreign source income (which includes foreign income tax offsets distributed but excludes deductions) identified in each individual Tax Statement with the label 20E and add together to determine the total amount of foreign source income from your Macquarie Asset Management Products. Add this amount to any foreign source income (including any foreign income tax offsets distributed but excluding deductions) you received from other investments. Step 2 Enter the total amount from step 1 at Item 20, label E (shown below). Step 3 To determine your total Other net foreign source income, you need to start with the amount entered at Item 20, label E and then take into account any deductions you may have this year which relate to the foreign income. Please refer to the Individual tax return instructions supplement to work out your total other net foreign source income which you enter at Item 20, label M. Guide to your 2017 Tax Statement 5

8 Foreign income tax offsets Item 20 on your income tax return supplementary section Foreign income tax offsets represent the amount of tax paid in the country where the income was earned. As with franking credits, the income you receive from a unit trust is distributed after the foreign tax is taken out. However, your Tax Statement will show the gross amount. The foreign income tax offsets may only be used to the extent in which they offset the Australian tax liability on foreign income earned. Step 1 If, on any of your individual Tax Statements there is an amount in the Part A entry Foreign Income Tax Offsets*, you will need to calculate the foreign income tax offsets you can claim. Please refer to the ATO guide Guide to foreign income tax offset rules 2017 to determine the amount that you can claim. Step 2 Once you have determined the amount in step 1, enter this amount of foreign income tax offset at Item 20, label O. 6 Guide to your 2017 Tax Statement

9 Capital gains Capital gains Item 18 on your income tax return supplementary section A capital gain can arise in the event of the sale of assets within a trust. The net gains in the event of the sale of assets in the trust must be distributed to investors and included in their income distribution. Gains only arising in the event of distribution appear in the Part A entry Total current year capital gains, and are identified with the label 18H. You may also realise a capital gain if you redeem or sell your units in a trust. If you redeemed or sold your units you will receive a separate Capital Gains Tax Statement (in addition to your Tax Statement) in relation to the capital gains tax event on redemption or sale of your units. Working out your capital gain For more information about capital gains tax and how to calculate your net capital gains or losses, see the Background to capital gains tax (CGT) section in this guide. If you made no capital gains or losses during the year (including in respect of other investments) print X in the NO box at Item 18, label G of your tax return. Step 1 If, on any of your individual Tax Statements there is an amount in the Part A entry Total current year capital gains that is identified with the label 18H, then that amount is your total current year capital gain for that particular investment. Add this amount to any other current year capital gains you have received from other investments. If you have capital gains amounts, you will have to print X in the YES box at Item 18, label G that asks Did you have a capital gains tax event during the year? (see next page). Please note that the calculation of any capital gain or loss you have made on the sale of units throughout the year will also need to be included at this item and can be obtained from your Capital Gains Tax Statement (together with your transaction statement) and not from the respective individual Tax Statements. You will need to add this amount to any capital gain disclosed on your tax statement. Step 2 Enter your total current year capital gains at Item 18, label H. We recommend you confirm your CGT position with your tax adviser. Step 3 Net capital losses Net capital losses arise when your relevant total capital losses are greater than your fully taxable and gross discount capital gains. For your Macquarie Asset Management Products, you may have net losses in respect of the redemption or sale of units. You may also have net losses that have arisen this financial year, or which have been carried forward from earlier financial years in respect of other investments. Any net losses from the redemption or sale of units in your Macquarie Asset Management Products can be obtained from your transaction statements. You may be able to use these net losses to offset any fully taxable and gross discount capital gains from your Macquarie Asset Management Products or other relevant investments. It is important to remember that Australian tax legislation requires that if a capital loss is used to offset a discount capital gain, then it must be offset against the full amount of the discounted capital gain (i.e. before the discount has been applied). The discount is then applied to the residual balance. If you have more capital losses than capital gains (i.e. unapplied capital losses), the balance is your capital loss carried forward amount. These can be carried forward to later years indefinitely until you have a capital gain against which you can offset it. Any unapplied capital losses from this current year or from previous years should be included at Item 18, label V. Guide to your 2017 Tax Statement 7

10 Net capital gains You need to include your net capital gain at Item 18, label A (see next page). Net capital gains for each Macquarie investment can be calculated by taking the net capital gains made within a fund (if any) shown in the Part A entry Net capital gains that is identified with the label 18A and adding to this any net capital gain on the redemption or sale of units after applying any capital losses. Where you are entitled to the CGT discount in respect of these investments, you should then apply the 50% CGT discount (for individuals) to this total and insert the resulting amount at Item 18, label A. Please refer to Step 10 of Part B of the ATO publication Guide to capital gains tax 2017 for further explanation of how to calculate the net capital gain to be shown at Item 18, label A. 8 Guide to your 2017 Tax Statement

11 Background to Capital Gains Tax (CGT) For individual taxpayers, certain capital gains may be reduced by 50% (the CGT discount). These are called discount capital gains and relate to assets that have been held for at least 12 months. Where appropriate, in relation to the capital gains included in your distributions from the fund (if any), we have used a combination of the discount method and fully taxable method when calculating the capital gains liability. That is why there may be two types of capital gains noted on your tax statement: Fully taxable capital gains capital gains in relation to assets that have not been held for 12 months or more. The full amount of these capital gains is taxable. Discount capital gains capital gains that are eligible for the CGT discount. The full amount has been distributed to you, but only 50% of this is taxable after any capital losses have been offset against this gross amount. CGT tax return information for the 2017 tax year You may be required to complete a CGT Schedule 2017 if you do not lodge a paper income tax return and your total current year capital gains or capital losses exceed $10,000. In these circumstances you should refer to Part C of the ATO Publication Guide to capital gains tax To work out your position on capital gains and losses refer to: your individual Tax Statements; your Capital Gains Tax Statement (where applicable) and any transaction statements (if you withdrew Units from your investment during the year); and ATO publication Guide to capital gains tax We recommend you seek professional tax advice for guidance in completing your income tax return and the CGT schedule. CGT and Non-Residents Broadly, a non-resident for Australian tax purposes will not be liable to tax unless capital gains distributed to them relate to underlying assets that are taxable Australian property. For the year ended 30 June 2017, capital gains distributed to nonresidents by any of the Macquarie Asset Management Products to which this guide relates are not subject to CGT. In relation to the disposal of Units in any of the Macquarie Asset Management Products which this guide relates, we recommend that non-residents seek professional tax advice to determine the CGT liability, if any. Guide to your 2017 Tax Statement 9

12 Non-taxable amounts You may receive an amount of tax deferred income or a return of capital amount (i.e. income that is non-taxable when you receive it) these amounts may also be referred to as Non-assessable trust distributions. Any tax deferred income or a return of capital may reduce the cost base of your units, which will impact your capital gains amount when you eventually redeem or sell your units in the trust. Please refer to the ATO publication Guide to capital gains tax 2017 for more information - about the impact of tax deferred and return of capital amounts on redeeming or selling your Units. Your income tax return and the Tax Statement In your income tax return you must declare income to which you are entitled during the period from 1 July 2016 to 30 June This may not coincide exactly with cash distributions you may have received during the same period. Special rules also apply for tax credits attached to Australian dividends or representing tax paid overseas on foreign investments. Expenses that relate to earning your income may also be deductible and can be claimed in your income tax return. They can help reduce your net taxable income. These expenses are not shown on your statement. We recommend you seek professional tax advice for guidance on completing your income tax return. This guide has been prepared for information purposes only to assist in the preparation of your 2017 income tax return. It does not take into account your particular facts and circumstances and should not be relied on as a substitute for professional tax advice. 10 Guide to your 2017 Tax Statement

13 Appendix This guide is relevant if you have an investment in the following Macquarie Asset Management Products: Macquarie Flexi 100 Trust ARSN Guide to your 2017 Tax Statement 11

14 How to contact us Phone: Web: macquarie.com Postal: Macquarie Specialists Investments, GPO Box 4294, Sydney NSW 2001 IMPORTANT INFORMATION All information in this guide is current as at 11 August 2017 and is subject to change without notice. Macquarie Financial Products Management Limited ABN (MFPML) is the responsible entity of the Macquarie Flexi 100 Trust. This is general advice only and has been prepared without taking into account the individual objectives, financial situation or needs of any particular investors. In deciding whether to acquire or continue to hold an investment in a structured product, investors should consider the relevant Product Disclosure Statement (PDS) which is available by calling MFPML and MAAML, do not give, nor do they purport to give, any taxation advice (including any tax (financial) advice service). The taxation discussion in this guide is based on current laws, anticipated legislation and Commonwealth announcements at the time of writing and is a general discussion only. Those laws and the level of taxation may change. The application of taxation laws to each investor depends on that investor s individual circumstances. Accordingly, investors should seek independent professional advice on taxation implications before making any investment decisions. This guide is provided as a general information service only and is not a complete or definitive statement of the tax consequences of investing in a Macquarie Asset Management Product. It should not be relied on as a substitute for professional taxation advice. This guide has been prepared in good faith with all reasonable care. However, certain parts of this guide are obtained or are based upon information obtained from third parties which may not have been checked or verified. Subsequent changes in circumstances may also occur at any time and may impact on the accuracy of the information. Neither MFPML nor any other Macquarie Group company, or any officers, employees or agents take any responsibility for the information contained in this guide nor give any representation or warranty as to the accuracy or completeness of the information nor does any of them accept any liability for loss or damage arising in any way from the use of information in this guide. Investments in the structured products the subject of this guide are not deposits with, or other liabilities of, Macquarie Bank Limited ABN (MBL) or of any other Macquarie Group company and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. Neither MBL nor any other member of the Macquarie Group guarantees any particular rate of return on, or the performance of, these structured products, nor do they guarantee the repayment of capital from these structured products. Commonwealth data included in this publication is copyright. 08/17