How Sharesight helps you handle Australian AMIT tax components
Record the Attribution Managed Investment Trust, (AMIT) cost base increase and decrease components for a AMIT holding distribution. Sharesight will correctly adjust the cost base and takes this into account when running the Capital Gains Tax Report and Taxable Income Reports.
What is an Attribution Managed Investment Trust (AMIT)?
A Managed Investment Trust, (MIT) is defined by the ATO as “a type of trust in which members of the public collectively invest in passive income activities, such as shares, property or fixed interest assets. A trust qualifies as a MIT if it meets certain requirements for the income year it is in operation.”
MITs income is taxed according to Division 6 of the Income Tax Assessment Act 1936.
In 2016 the Australian Government sought to make changes to the taxation of trusts to make Managed Investment Trust administration simpler, reduce administration costs and make the sector more competitive internationally. To do this MITs became a distinct trust structure, that would no longer be taxed the same as a traditional trust – such as a family trust. The new structure is known as an Attribution Managed Investment Trust, (AMIT).
Existing MITs that elect to apply the regime can become Attribution Managed Investment Trusts. Under this regime trustees can now “attribute” taxable income to investors, without the need to make a distribution payment to unit holders. In effect, AMITs no longer need to pass through all the income immediately, as is the case with traditional trusts.
These attribution changes mean that under the AMIT regime there are changes to how cost base is handled. Previously MIT taxation only allowed unit holders to record cost base decreases for CGT exempt or tax-deferred payments. Under the AMIT regime it is now possible to record a cost base increase for units in cases where the “attributed” (which is where the A in AMIT comes from) taxable income exceeds the distribution paid to the unit holder. This will occur in cases where income is reinvested by the trust.
How Sharesight handles AMIT tax calculations
Within an Australian Tax Residency portfolio in Sharesight the distribution payment form has optional fields, ‘AMIT cost base increase’ and ‘AMIT cost base decrease’ enabling you to accurately account for AMIT cost base amounts manually once you receive the value from the MIT holding on your AMMA (AMIT Member Annual) statement.
Once the AMIT field values have been added, Sharesight includes the values in the Capital Gains Tax Report calculations and the Taxable Income Report for Australians completing their Tax Return for Individuals 2018 form.
IMPORTANT: When you receive your AMMA statement, check the component breakdowns against the values automated by Sharesight, as these values are likely to be updated in the annual tax statement and don’t include any AMIT cost base increase or decrease that applies.
How AMIT cost base adjustments impact investment returns
Sharesight takes into account both AMIT cost base increase and decrease components when calculating investment performance:
AMIT cost base decrease - When calculating performance Sharesight adds the AMIT cost base decrease component to your gross dividend given that it represents cash received that was not attributed to you.
AMIT cost base increase - When calculating performance Sharesight deducts the AMIT cost base increase from your gross dividend given that it reduces your attributed income to the net cash amount you actually received.
How to account for AMIT cost base increase or decrease amounts in distributions
Pro rata AMIT cost base increase or decrease amounts across all distributions
1 – From any page click on the ‘Report’ tab.
2 – Click the ‘Taxable Income Report’ tile.
3 – From the dropdown calendar, select the date range you would like to run the report in.
4 – Click ‘advanced options’.
5 - Select ‘Show holding totals’ and click ‘Apply’.
6 - Click on the ‘Enter Annual Tax Statement Components’ button beneath the trust distribution totals.
7 - Enter in the required fields referring to the below table from your EOFY statement:
|Sharesight component description||Vanguard & iShares ETFs||Beta Shares ETFs & State Street SPDR|
|1||Franked Amount||13C - 13Q |
Alternatively: Go to the Franked Distributions Row, and subtract the Tax Paid/Offsets column value from the Attribution column value.
|13C - 13Q|
|2||Unfranked Amount||13U |
Alternatively: Go to the Non primary production income row, and use the value under the Attribution column.
|3||Interest||Leave this as 0, Interest is included in the Unfranked Amount||Leave this as 0, Interest is included in the Unfranked Amount|
|4||Tax Deferred||For AMITs, Tax Deferred should be left as blank||For AMITs, Tax Deferred should be left as blank|
|5||AMIT Decrese||Enter the AMIT cost base net amount – excess (Reduce cost base) row value||Enter the AMIT cost base net decrease amount row value|
|6||AMIT Increase||Enter the AMIT cost base net amount – shortfall (Increase cost base) row value||Enter the AMIT cost base net increase amount row value|
|7||Foreign Source Income||20E |
Alternatively: Go to the foreign source income row, and use the value under the Attribution column.
|8||Discounted Capital Gains||Add up the Discounted capital gains row values from the Tax Attribution Column||Add up all the Capital Gains – discounted method row values from the Tax Attribution Column|
|9||Capital Gains||Add up the Capital Gains – other method row values from the Tax Attribution Column||Add up all the Capital Gains – other method row values from the Tax Attribution Column|
|10||CGT Concession||Use the AMIT CGT gross up amount row value||Use the AMIT CGT gross up amount row value|
|11||Non Assessable||For AMITs, Non Assessable should be left blank||For AMITs, Non Assessable should be left blank|
|12||TFN Withholding tax||Use the Less TFN Amounts Withheld row (if any)||Use the less: TFN/ABN Withholding Tax row (if any)|
|13||Foreign Income Tax||20O |
Alternatively: Go to the Assessable foreign source income row, and use the value under the Tax Paid/Offsets column.
|14||Franking Credits||13Q |
Alternatively: Go to the Franked distributions row, and use the value under the Tax Paid/Offsets column.
|15||Other Net FSI||20M||20M|
Sharesight will then calculate and pro rate the AMIT component across the distributions received throughout the year or period the trust was held.
When using the pro rata form, it is recommended to add all components. If only the AMIT adjustments are entered, the cash position and other tax components will most likely be incorrect.
With the above table fields, below are examples of Vanguard/iShares ETFs & Beta Shares ETFs/State Street SPDR statements:
8 - Click ‘Save and confirm payout changes.
Account for AMIT cost base increase or decrease amounts using the individual distributions form
1 – Within the AMIT Individual Holding Page, click on the relevant distributions.
2 – On the ‘Edit a Payment’ form of the selected distributions, click on ‘+add another field’ dropdown beneath ‘TFN Withholding Tax’.
3 – Click on the dropdown list.
4 – Select either ‘AMIT cost base increase’ or ‘AMIT cost base decrease’
5 – *Type *the amount of the distributions that is attributable to ‘AMIT cost base increase’ or ‘AMIT cost base decrease’.
6 – Verify and adjust as needed the other details on the form and select ‘Save and confirm payout’.
Sharesight does not provide taxation advice and this report does not constitute personal taxation advice. If you have any questions about your tax position we recommend you contact your accountant or tax advisor.
Additional Resources, watch the using Sharesight to complete your tax return webinar recorded 24 June 2020. Learn how to use Sharesight to make completing your tax return quicker, easier and more accurate by Ben Clendon, Sharesight Product Manager.
Last modified on August 23, 2021 UTC