Since 2017, most fund managers have chosen to operate under a tax structure which the Australian Taxation Office (ATO) calls “attribution managed investment trusts” (AMITs). This means that the fund “attributes” amounts for tax purposes to each member based on their unit-holding.
Previously, investors were taxed on their less precise “present entitlement” to the trust’s income.
So, that share of the fund’s income is now reported to you via an AMIT member annual statement, which is similar to the old distribution statement but carries more detail, including any net capital gains and losses when the fund sells shares.
Each annual statement would give you the cost base of the units bought with reinvested money. Since 2017, the ATO has received data from fund managers that allows it to “pre-populate” that part of your tax return.
For earlier data, ask Pengana what they can provide, and otherwise trawl through your statements for historical unit prices.
I have not fully researched which funds provide capital gains statements when investors withdraw, as you want to do, but I note that Pengana says on its website that it does not, while those of BT, Colonial First State and Perpetual say that they do. So, it would appear that some do and some don’t.
I am the sole member of a superannuation fund in “pension” mode, containing $1.5 million in assets – all in shares and fixed interest. My son and I are directors of the corporate trustee. The taxable component is $1 million and the accrued capital gain is $130,000. What tax is involved when I expire and the assets are distributed to my adult children under the terms of my will?
Once you fall off your perch, the assets do not automatically pass to your estate, to be distributed according to your will, unless you have created a binding death benefit nomination, and preferably given copies to your children.
Otherwise, your son would be the sole director of the trustee company, and would have discretion to distribute assets to some or all of the children, and the estate.
If he distributes the money equally to, say, four children, each would receive $250,000 in taxable component and would be taxed 15 per cent, plus the Medicare Levy or $42,500.
If he passes the money first to the estate, it does not pay the Medicare Levy, so total tax would be $150,000.
However, you can take the money out tax-free while you are still alive. So, if a doctor gives you terrible news, have your children push your wheelchair to your accountant’s office and close down the fund.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
If you have a question for George Cochrane, send it to Personal Investment, PO Box 3001, Tamarama, NSW, 2026. All letters answered. Help lines: Australian Financial Complaints Authority, 1800 931 678; Centrelink pensions 13 23 00.
