The Portfolio Service Personal Investment Plan

The Portfolio Service Personal Investment Plan The Portfolio Service Ta guide 2016 The Responsible Entity of The Portfolio Service Personal Investment Plan is Questor Financial Services Limited ABN 33 078 662 718 AFSL No 240829.

Australian resident tapayers complete their 2016 ta return. To complete your ta return you will need the following: a copy of the Personal Investment Plan (the Plan) Consolidated taation statement for the financial year ended 30 June 2016 (taation statement) a copy of the Plan Statement of capital gains for the financial year ended 30 June 2016 (CGT statement), where applicable copies of schedules from the Australian Taation Office (ATO): Ta Return for Individual 2016 Ta return for individuals (supplementary section) 2016 Individual ta return instructions 2016 Individual ta return instructions supplement 2016 Guide to capital gains ta 2016 and You and your shares 2016 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 ta 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 taation laws are comple so we recommend you seek taation advice from a registered ta 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 ta return and your statements In your ta return, you must declare income that you were entitled to during the period 1 July 2015 to 30 June 2016 (the financial year). This may not coincide with the actual cash distribution you have received during the same period. Your Annual reporting package 2016 includes the following statements and, where applicable, you need to refer to them to complete your 2016 ta return. 1 The taation statement summarises all of the income entitlements on the investments held in the Plan, the deductible amount of epenses paid from the Plan as well as any relevant amounts of ta paid and ta 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 2016 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 ta return are detailed in Part A: Summary of Ta Return of the taation statement. For capital gains items, you are required to combine the capital gains items detailed in Part A: Summary of Ta Return with the relevant amounts from the Statement of Capital Gains for the financial year ended 30 June 2016. 2

Understanding the components of your consolidated taation statement Part A Summary of ta return This section of your taation statement highlights the major components of your distribution. For investors with straightforward ta returns, this information should help you complete your ta return. The ta return label reference in Part A relates to the Individual ta return 2016 and Ta return for individual (supplementary section) 2016. The amounts shown in Part A of your taation statement should be included in your ta return against the corresponding ta return labels. A breakdown of the distribution components is shown in Part C of your taation statement. 1. Label 10L Gross interest This item represents the total interest income that has been paid or credited to your account from direct investments. 5. Label D8 Dividend deductions This item represents all epenses 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 ta deduction. This amount is detailed in Part D of your taation statement. 6. Label 13U Share of net income from trusts, less net capital gains, foreign income and franked distributions 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 ecludes capital gains, foreign income and franked distributions which are shown separately on your taation statement. The Portfolio Service 2. Label 11S Dividends unfranked amount This item represents the total of unfranked dividends that have been paid or credited to your account from direct investments in Australian companies. 3. Label 11T Dividends franked amount This item represents the total of franked dividends that have been paid or credited to your account from direct investments in Australian companies. 4. Label 11U Dividends franking credit This item represents the amount of franking credits (including cents) attached to franked dividends from direct investments in Australian companies. 7. Label 13C Franked distributions from trusts 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. Label 13Y Other deductions This item is the ta deductible epenses charged to your account in the income ta year. These epenses may be deducted against the distribution income you received. If you have incurred additional deductible epenses in relation to your distribution income, these should also be disclosed at this label. Franking credits are Australian ta offsets that you may be entitled to claim. Your entitlement to claim franking credits as a ta offset against your Australian ta 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 2016. 3

9. Label 13Q Share of franking credit from franked dividends This item includes your share of franking credits (including cents) from trusts. Franking credits are Australian ta offsets that are attached to franked dividends from trust distributions you received. Your entitlement to claim franking credits as a ta offset against your Australian ta 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 2016. 10. Label 13R Credit for ta file number (TFN) amounts withheld from interest, dividends and unit trust distributions This item represents the amount of ta 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. Label 13A Share of credit for amounts withheld from foreign resident withholding 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 ta credits, the credits for foreign resident amounts withheld may be offset against your Australian ta liability on taable income. 12. Label 18H Total current year capital gains This item is the total amount of capital gains before any capital gains ta (CGT) discount has been applied. This amount also includes foreign capital gains (if applicable). 13. Label 18A Net capital gain This item is the net capital gain distributed to you. The items making up this amount are detailed in Part B of your taation 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 ta 2016 for further information. 14. Label 19K Foreign entities Controlled Foreign Company (CFC) income 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 measures, please refer to the ATO publication Foreign income return form guide 2016. 15. Label 20E Assessable foreign source income This item is income from your overseas investments. It comprises assessable foreign dividends, foreign interest and all other assessable foreign income (including foreign ta withheld on income not already shown on your ta return) for which you are liable to pay Australian income ta. It ecludes 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 ta return instructions supplement 2016. 4

16. Label 20F Australian franking credits from a New Zealand franking company This item is the franking credits arising from ta 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 2016. 17. Label 20M Other net foreign source income Part B CGT information amounts This section of your taation statement gives you a detailed breakdown of capital gains that you received from trust distributions. CGT concession and ta deferred amounts may not need to be included in your ta 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 ta return. For further information regarding the treatment of these amounts, you should refer to the ATO publication Guide to capital gains ta 2016. The Portfolio Service This item takes into account all foreign deductible epenses 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 ta return instructions supplement 2016. 18. Label 20O Foreign income ta offset This item is your share of foreign income ta offset (including cents). The foreign income ta offset represents the amount of foreign income ta withheld in another country on income received from foreign investments. If your foreign income ta 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 ta offsets rules 2016 to work out your entitlement. 5

Part C Income components This section of your taation 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 epenses 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 matri below. Total deductible epenses have been included as Other deductions (refer to item 8 on page 3). Non-deductible epense 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 ta adviser to discuss. Management costs Deductible Non-deductible Unallocated Administration Fee Administration Fee Rebate Account Keeping Fee Closing Adjustment Advice fees Advice Fees On Going Advice Fees Transfer Advice Fees Transaction Advice Fees Upfront Advice Fees One Off Other fees and costs Transaction Fee Audit, Legal and Other Epenses The additional information in Part C of your taation statement may be required to complete your ta return. Part D LIC capital gains information An LIC is an Australian resident company, listed on the Australian Securities Echange, which carries on the business of managing an investment portfolio. LICs offer investors eposure to a diverse and professionally managed portfolio of assets, similar to those found in many unlisted managed funds. Eamples of assets may include Australian shares, international shares and infrastructure assets. To determine whether an investment is classified as an LIC, investors should check the LIC classification list which is published on the ASX website. If an LIC pays a dividend to you that includes an LIC capital gain amount, you may be entitled to an income ta deduction. You can claim a deduction if: you were an Australian resident when an LIC paid you a dividend, and the dividend included a LIC capital gain amount. An LIC paying a dividend will advise its shareholders how much of the dividend is attributable to an LIC capital gain (the attributable part). An individual, trust or partnership can deduct half of the attributable part advised by an LIC. A complying superannuation entity or life insurance company can deduct one third of the attributable part advised by an LIC. 6

Eample of consolidated taation statement for the financial year ended 30 June 2016 Part A: Summary of ta return Amount Ta return label Ta return 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 Ta return (supplementary section) Share of net income from trusts, less capital gains, foreign income and $13,503.59 13U franked distributions 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 ta file number amounts withheld from interest, $264.94 13R dividends and unit trust distributions 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 ta offsets $2,216.05 20O The Portfolio Service Part B: Capital gains ta information Amount Capital gains discount method $280.66 (grossed up amount) Capital gains indeation method $113.43 Capital gains other method $98.20 Total current year capital gains $492.29 Capital gains ta (CGT) concession amount $276.28 Ta deferred amounts $516.64 7

Part C: Income components Income and epense Ta paid and offsets Taable amount Australian income 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 (fied interest) $0.00 $0.00 Dividends Unfranked (trust) $18.46 $18.46 Dividends Unfranked CFI $37.35 $37.35 Interest (fied 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 Ta Deducted $264.94 $264.94 Total Australian income $38,527.79 $12,672.67 $51,200.46 Capital gains Discounted method (TARP) $42.88 $42.88 Discounted method (NTARP) $97.45 $97.45 Indeation method (TARP) $33.20 $33.20 Indeation method (NTARP) $80.23 $80.23 Other method (TARP) $27.66 $27.66 Other method (NTARP) $70.54 $70.54 Total current year capital gains $351.96 $351.96 Foreign income 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 Assessable foreign source income $1,301.99 $2,549.02 $3,851.01 Other non-assessable amounts Ta-eempt $15.37 Ta-free $59.02 Ta-deferred $516.64 CGT concession amount $276.28 Total non-assessable amounts $867.31 Total distribution $41,049.05 $15,221.69 $55,403.43 Less TFN amounts withheld $0.00 Less Non-resident withholding ta $930.98 Net cash distribution $40,118.07 Other deductions 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 8

Capital gains information To determine the total current year capital gains and net capital gain amounts which you are required to disclose in your ta return, you need to combine the capital gains items detailed in the taation 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 ta 2016. The following table summarises the types of capital gains details in both the taation and CGT statements. Capital gain/(loss) calculation method Relevant section of your statement Description Other capital gain Nominal gain/(loss) These gains relate to assets held for less than 12 months which were not eligible to apply the CGT discount. The entire amount of the gain is taable. The Portfolio Service Discounted capital gain Indeed capital gain TARP and NTARP Nominal gain/(loss) Frozen Indeed Gain 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, These are capital gains that are eligible to apply the indeation method. The capital gains amount shown here has been indeed accordingly. For Australian resident investors, the split between Taable Australian Real Property (TARP) and non-tarp (NTARP) capital gains can be disregarded for the purposes of completing your ta return. The split of the capital gains between TARP and NTARP is only relevant for non-resident investors who generally only pay Australian ta on TARP capital gains. If you are a foreign resident investor, you may be entitled to an eemption 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 ta 2016 for further information. We suggest that you seek professional taation advice regarding the application of the CGT regime to your own individual circumstances. 9

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 indeed gain column or both. Where an amount appears in the nominal gain/(loss) or frozen indeed 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 indeed 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 taation statement) and any other capital gains you have made during the year. This amount needs to be disclosed at ta 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 ta return label 18A. Note: If you have any prior or current year capital losses, we recommend that you seek professional taation 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 (FIFO) 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 ta 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 taation advice. CGT discount rates 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 Superannuation fund 33.33 Trust 50.00 10

Capital gains taation information statement Eamples of statement of capital gains for the financial year ended 30 June 2016 Investment Date sold Date of Investment option 1 Investment option 2 Investment option 3 purchase Units sold Sale proceeds Adjusted cost base Nominal gain/(loss) Frozen indeed 30/11/2015 3/03/1998 150 $900.00 $425.00 $475.00 $475.00 12/04/2016 6/06/1996 845 $10,000.00 $7,000.00 $3,000.00 $2,790.00 18/01/2016 20/12/1997 745 $8,500.00 $6,250.00 $2,250.00 $2,250.00 gain The Portfolio Service Investment option 4 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 2016 shown above and the sample Personal Investment Plan consolidated taation 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 taation advice. The sample statement of capital gains for the financial year ended 30 June 2016 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 eample 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 Taation of Financial Arrangement (TOFA) rules. Holders who are subject to TOFA should seek their own professional taation 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 indeed. A traditional security may be, for eample, 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 eceed 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 taed 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. 11

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