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  • Chapter C2:  Non-assessable payments from a managed fund

    Attention

    Warning:

    This information may not apply to the current year. Check the content carefully to ensure it is applicable to your circumstances.

    End of attention

    Non assessable payments from a managed fund to a unit holder are common. If relevant to you, these non assessable payments may be shown on your statement from the fund as:

    • tax free amounts (where certain tax concessions allowed to the fund, for example, deductions for the cost of buildings, mean it can pay greater distributions to its unit holders)
    • CGT-concession amounts (the CGT discount component of any actual distribution)
    • tax exempted amounts (generally made up of exempt income of the fund, amounts on which the fund has already paid tax, or income you had to repay to the fund), or
    • tax-deferred amounts (other non assessable amounts, including indexation allowed to the fund on its capital gains and accounting differences in income).

    Tax-exempted amounts do not affect your cost base or reduced cost base. However, if your statement shows any tax deferred, CGT-concession or tax-free amounts, you adjust the cost base and reduced cost base of your units for future purposes as follows:

    • cost base - add the tax deferred amounts and the CGT-concession amounts received before 1 July 2001 and deduct the total from the cost base, or
    • reduced cost base - add the tax-deferred amounts, the CGT-concession amounts received before 1 July 2001, and the tax-free amounts and deduct the total from the reduced cost base.

    The cost base and reduced cost base adjustments are more complex if you deducted capital losses from a grossed-up capital gain. If this applies to you, see the worked example for Ilena to work out how to make the adjustments.

    If the total of the tax-deferred amounts and the CGT-concession amounts received before 1 July 2001 is greater than the cost base of your units, you include the excess as a capital gain. You can use the indexation method if you bought your units before 21 September 1999.

    Handy hint

    You cannot make a capital loss from a non assessable payment.

    Last modified: 06 Oct 2009QC 16182