Terms used for SMSF portfolio administration

Listed below are some of the most frequently used terms regarding portfolio administration.

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A bank account is mandatory for SMSF Funds only.

Note: SMSF bank account cannot be made available for personal use.

Bank type is the format of the file that you have selected to allow you to upload bank transactions via file upload process.

Some companies offer Bonus Shares as an alternative to a dividend. When an investor takes on this offer, they do have to forfeit any dividend. There is no tax payable on these shares until they are sold hence Bonus shares are entered with a zero cost base.

Note: Dividends are automatically generated, via Corporate Action Detail menu function, select dividend and change Option Plan to 'Bonus Share Plan' and then enter your Bonus Shares via Trade Transaction menu item. Also read about Bonus Issue.

When bonuses are issued to the underlying company cost of the bonus is automatically split between purchased shares and bonus. In the event where shares are issued into another company then cost of the bonus may depends on ATO tax ruling. Cost may possibly be split between the original purchases and the bonus. In this instance a capital return is applied to reduce the cost base of the purchased shares and this capital return is then applied to the bonus.

Note: Bonus Share Plan and Bonus Issue are 2 separate corporate actions and are treated differently. Also read about Bonus Share Plan.

A broker is linked to each portfolio account. If you have multiple trading accounts then it would be best to create separate portfolio account for each broking account even if they are held with the same broker.

Example: One trading account is for shares and the other is for CFD trading account.

Brokerage is fees charged on investments bought and sold. Usually there is a minimum fixed amount charged and then a percentage of the total consideration. Fees vary from broker to broker.

This is the share trading account number. Upload of contract notes will use this reference number to link this account to the broker.

Note: Do not confuse this with this with your login account number.

Some companies return excess capital via capital return. No tax is payable, instead the cost base of the shares is reduced. If the shares are sold prior to payment date then the capital return received will be subject to capital gains tax, in the same way as the underlying shares.

Example: If the shares were held for a long term then the capital return will be treated the same and a discount will be applied on the capital return amount.

Capital Gains Tax (CGT) is applied to all investments that are subject to CGT. Our CGT engine utilises 3 phase processing method. All losses are offset first from short term transactions and then from the long term transactions if required. Discount is applied to long term transactions after offsetting losses. Shares bought before 20th September 1985 is tax free while shares bought after this date and before 21st September 1999 has the indexation option. CGT Engine will select the best option between indexation and discount method.

CGT Exempt forms part of rollover from another fund. There is no tax applicable on this amount. This is a tax free component.

Co-Contribution is the amount paid by the government to low income earners. The amount of Co-Contribution paid depends on the member's income and amount of undeducted contribution member has contributed into the fund during the financial year.

Concessional Cap amount is made up of Employer, Salary Sacrifice and Member Deductible contributions. There is a limit on how much concessional amount a member can contribute into the Fund over the Financial Year. The limit is also depended on the age of the member. Check the ATO website on the limits via our link page. Heavy penalties apply if the cap is exceeded.

Consideration is equal to shares / units multiplied by purchase price.

Contribution Tax applies to Employer, Salary Sacrifice, Member deductible contributions and Taxable – Untaxed from Rollover.

Corporate Action (CA) transactions are either system generated or manually created.

System generated transactions are automatically adjusted until edited by user when it is accepted as the final value. Deleting changed transaction will revert back to system generated status.

Following transactions are system generated:

  • Dividends
  • Distributions
  • Capital Return
  • Bonus Issue
  • Share Buy Back (Dividend)
  • Share Instalments
  • Share Split
  • Share Reconstruction

Note: All (CA) Transaction events will only be generated on/after Financial Year Start Date of Fund Account. While dividends with ex-date prior to Fund Start date and payable on/after Fund Start Date will be included.

This is the reference number on the contract note statement. For Managed Funds and Other Assets a alpha-numeric number can be applied. Each transaction must have a unique number. This to avoid entering the same transaction twice.

Each Buy investment transaction cost base is the sum of Consideration + Brokerage + GST. At disposal this cost base may be reduced by tax free/tax deferred (if applicable). Reduction of this cost base will depend on the profit/loss made on the transaction and the amount of tax free/tax deferred.

Select country where you lodge your annual tax return.

Investments held for more than 12 months are entitled to a discount (50% to individuals, 33% to SMSF). Discount can only be applied once all losses have been offset including any prior year losses (if applicable).

CGT component of a distribution is combined with share transactions (sell trades) when calculating the final CGT position. See Realised CGT Report and Tax Reconciliation Report.

Some distributions are paid in current financial year and taxable in the previous financial year. In this instance the distribution will be reported in both financial years. See Tax Reconciliation report for more information.

This is when a dividend is payable by an investment company. Entitlement to the dividend is before ex-date.

DRP is referred to as Dividend Re-Investment Plan. Investors are issued with additional shares at a discount to the market and no brokerage is charged on the trade. Cost base of the share is equal to the dividend amount. Note: Tax is payable on the dividend.

Employee contribution is when a member contributes into superannuation fund with after tax money. Also referred to as Member Undeducted and no tax payable on the contribution. Remains as tax free in the Fund.

Employer contribution is the standard 9% guarantee that an employer pays into employee's superannuation fund. Contribution Tax is payable on this transaction.

Investors are not entitled to any corporate action on or after this date. Example of some corporate action are Dividend, Distribution, Capital Return, Interest etc.

Expense report will consist of all expense transactions from all cash accounts plus any Listed Investment Capital Gain deductions (LIC Gain) from dividends. Individuals can claim 50% while SMSF fund can claim 33.33% of the full LIC Gain amount. Check your dividend statement.

Fund account has a financial year start date, corporate actions for the account will be generated from this date.

A Fund Account is the first thing a user needs to create. Each Fund Account is set up as a single Tax entity.

Goods and Services Tax (GST) is charged on brokerage fees.

Imputation Credit equates to the amount of tax already paid by the company issuing the dividend. If credits exceed investor's tax payable then this excess amount is refundable.

Imputation credit 45 day rule applies when an investment is bought before dividend ex-date and sold on or after ex-date. No of days between the buy and sell date is less than 45 days including the buy and sell date while for preference shares its 90 days. There is a threshold of $5,000.00, once total credits in the financial year exceeds this limit only then those received within the 45 / 90 day rule is excluded from tax and is non refundable.

Investments bought on or after 20 September 1985 and before 21st September 1999 have an indexation option for all gain parcels, at the time of calculating Capital Gains Tax the CGT engine will select the best method between indexation and discount.

Listed Investment Capital Gain (LIC Gain) is included in dividends issued by Listed Investment Companies. LIC Gain is treated like an expense and is tax deductible, for individuals it's 50% and for SMSF Funds its 33.33% deductible. Expense report already shows the discounted amount.

Member Balance is calculated based on unit price of the Fund Account using the Net Asset Value of the Fund (NAV). All member transactions are unit based.

Member deductible contribution is the amount paid into the superannuation fund where member claims this amount as a tax deduction in their personal tax returns.

Member earnings are calculated using unit price based on the units held in the Fund. Excludes all member contributions, expenses and withdrawals during the year to determine the Net earnings for the year.

Member undeducted contribution is a deposit into superannuation fund from after tax money, also referred to as Employee contribution. No tax can be claimed and this deposit is counted towards Non Concessional Cap.

Non Concessional cap applies to all contributions into the superannuation fund from after tax money. Current limit is $150,000 while members can deposit $450,000 which is equivalent to 3 years of non-concessional contributions. Simply means that the member cannot deposit anymore non-concessional contributions until the 4th financial year. Heavy penalties apply if the cap is exceeded.

Corporate action transactions have a payable date, this is when the investment company makes the payment into the shareholders bank account for any dividends, distributions, interest, capital return etc.

A plan is linked to a Fund Account. Cost of the plan will vary depending on product purchased.

Every Portfolio Account has to belong to a Fund Account. Multiple portfolio accounts can be set up for each Fund Account. Also see Fund Account, portfolio type.

CGT Calculation will depend on this setting. Portfolio accounts will either be CGT based or Income based. Income based is for Pension accounts where all earnings are Tax free.

Preservation Age in a Superannuation Fund is at age 55 for members born before 1st July 1960. Increments by 1 year until age 60. Anyone born on or after 1st July 1964 will have a preservation age 60.

Superannuation Fund members can redeem from the fund tax free after reaching preservation age as long as there is available UNPB monies. Tax Free threshold amount applies to taxable component only as Tax Free component is already tax free.

Preserved amount can only be withdrawn after reaching retirement age and member is officially retired. All monies deposited after 1st July 1999 are preserved. Also read about UNPB and RNPB.

Prior Year Losses is the amount of losses brought forward into current financial year and offset against gains. Capital losses can only be offset against capital gains and not against Income. Net loss simply gets carried forward to the following year.

Profit analyser determines profit/loss on investments based on an indicative price or as at last close price. Simply select the stock and enter a price. Calculation includes any tax free/tax deferred from distributions. Note: Final CGT gain/loss depends on the overall position of the Fund at Year End.

Realised report consists of all stocks sold across all portfolio accounts in the Fund. Report is generated by financial year. At year end if changes are made to any trade or corporate action transaction then reproduce the report as Capital Gains Tax position may change.

RNPB is referred to as Restricted Non-Preserved Benefit this amount can only be withdrawn under certain conditions. Once retired this restriction no longer applies. Also read about UNPB and Preserved Amount.

Salary Sacrifice is the amount of contribution deposited by member from their salary. This is pre-tax money and contribution tax is payable by the Fund member.

This is normally 3 business days from the trade date. Settlement date cannot be prior to the trade date. All unsettled amount will be reported in the portfolio valuation report.

Companies offer off market share buy back to share holders, payment is made in the form of a dividend combined with a capital amount. Capital amount is used to calculate capital gains tax on the sale unless the company obtains a class ruling from the ATO. In this instance the amount used as proceeds for CGT calculation is that determined by the ATO. This amount may differ to the capital paid by the company. The dividend component is included in your income report.

Spouse contribution is the amount of contribution paid into the member's account by their partner.

Stock prices are uploaded daily. Update of the price will only occur if the stock has traded on the day.

When companies issue distribution, a portion of this distribution can be made up of tax deferred. There is no tax payable on this amount until the shares are disposed and tax deferred is applied to the cost base of the shares. Amount applied depends on how much profit/loss is made on the Sell transactions.

Each Fund Account is associated with a tax entity type. CGT Calculation is based on this setting.

Select from the following types:

  • Individual
  • SMSF
  • Company

Tax Financial Year End Date applies to distributions where the distribution payment is made in one financial year and taxable in another financial year. Income report will include this distribution in both financial years. Tax Reconciliation report will separate prior year distributions from current year distributions.

Tax Free amount in a superannuation fund is the sum of all contributions deposited with after tax money. Rollover money from another fund will be made up of tax free and taxable money. These 2 components have been applicable since the introduction of Super Simplification on 1st July 2007.

When companies issue distribution, a portion of this distribution may be made up of tax free. There is no tax payable on this amount until the shares are disposed. Tax free amount is applied to the cost base of the shares. Amount applied depends on how much loss is made on the Sell transactions. Not applicable if the Sell transaction has made a profit.

Tax Statement report consists of summary details from CGT, Income, Expense Reports. For SMSF Funds member transaction summary is also included.

Taxable amount in a superannuation fund is the sum of all member pre-tax contributions and employer contributions. Rollover money from another fund will be made up of tax free and taxable money. These 2 components have been applicable since the introduction of Super Simplification on 1st July 2007.

Untaxed amount in a superannuation fund is the sum of all member pre-tax and employer contributed money where tax has not been applied. Therefore tax will apply when rolling untaxed taxable money into SMSF account.

Trade report consists of all investment trades plus corporate action transaction that change units and cost base to the investment transaction. Example Bonus Shares, Share Split, Share Reconstruction, Capital Return.

Trust Deed Date is when an SMSF set up the trust deed document.

All member transactions are unit based in an SMSF fund. Units are calculated using unit price based on Net Asset Value (NAV) of the Fund.

UNPB is referred to as Unrestricted Non-Preserved Benefit that can be withdrawn at any time from the fund. Also read about RNPB and Preserved Amount.

Unrealised CGT report consists of all stocks unsold as at report date. The cost base on the report will always match the cost base of holdings in the Valuation Report.

This is the date as at which all investments held across all portfolio accounts in a Fund are valued using the last stock price as at that date. Any outstanding settlements and dividends payable are included.

If you have a query about any Terms that is listed on this page or you have further questions, send us an email support@unip.com.au