Chapter C2-Non-assessable payments from a managed fund
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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 received by the fund 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 received by the fund on its capital gains and accounting differences in income).
Tax-exempted and CGT-concession amounts do not affect your cost base or reduced cost base. However, if your statement shows any tax-deferred or tax-free amounts, you adjust the cost base and reduced cost base of your units for future purposes as follows:
- cost base-deduct the tax-deferred amount from the cost base or
- reduced cost base-add the tax-deferred and tax-free amounts and deduct the total from the reduced cost base.
If the tax-deferred amount 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.
A CGT-concession amount received after 1 July 2001 is no longer taken off the cost base or the reduced cost base.
Before 1 July 2001 payment of an amount associated with building allowances was treated as a tax-free amount. Payments after 1 July 2001 are treated as tax-deferred amounts.
You cannot make a capital loss from a non-assessable payment.
A CGT-concession amount received before 1 July 2001 is treated in the same way as a tax-deferred amount.
Last modified: 06 Oct 2009QC 27431