Distribution Tax Automation - Entries that have an ex Date in the financial year, but paid after


I am a long time Sharesight user, trialling Simple Invest 360, and looking to transition if the trial is successful, but I’m running into a problem (or knowledge gap) on how to handle Distribution Tax Automation where a payment is received after the end of a financial year, but belongs in the prior financial year.

I’m re-running for the FY2020 financial year to see if I can re-create the results I’ve already completed for my family trust, and so have a real world example where I’m running into problems.

Firstly, the second payment for MICH (Magellan Infrastructure Fund - Currency Hedged - not the greatest investment, but I digress) was received on 28 July 2020, but attributable for 30 June 2020.

When originally matched, it was allocated to a 61800/MICH.AX account (distributions receivable), and didn’t even show up in the Distribution Tax Automation screen.

I found another support note that suggested re-coding it to 23800 Distributions Received, which I did, but it didn’t show up until I changed the Ex Date under more in the transaction to 30/06/2020.

I would show in screen shots, but I can’t embed them (I think because I’m a new member)

However, if I click on the lightning bolt, the second payment is excluded, so I end up with a variance.

Sharesight gets this right - it knows that the second payment belongs in FY2020, even though the payment was received after the end of FY2020.

Aside from editing the original bank account transaction date to 30 June (which, given that it has come from an automatic bank account feed, doesn’t seem sustainable), I must be missing something obvious here.

Any suggestions?

Hi Bernard,

When posting the distributions use the 23800 accounts to post Distribution Income that should be taxable in the current year. And use the 61800 account as the distribution receivable account.

In this case, in the 2020 FY you would post a journal as follows

30th of June 2020

61800/MCH.AX Debit
23800/MCH.AX Credt

Then in the 2021 FY when the cash amount is received on the 28th of July 2020 you would record a journal entry as follows.

60400 Debit
61800/MCH.AX Credit

If you need any further assistance with processing distribution transactions please do not hesitate to log a support call and the BGL support team will be able to assist you further.

Thanks for the response and explanation, Andrew.

So are you saying that I need to manually journal the 61800 / 23800 journal for each holding for 30 June each year?

I would have thought that this is something that BGL would have been able to automatically do for distributions that were accrued for periods prior to 30 June and received after 30 June.

I guess that’s one thing that Sharesight has over BGL.

Given the hooks into registries that BGL has, I would have thought that when distributions were declared, BGL could create those entries as pending corporate actions for review / approval? Maybe I should post that as a product improvement suggestion, as I would think that it would dramatically improve the end of year processing for anyone running a super fund or trust in SI360 or SF360.

Hi Bernard, the Accrual process can be auto-posted using the Distribution tax automation process. See help file below.

In this help file refer to the “Post Accruals” section.

Note: the Distribution tax automation can also be used to auto post the tax components relating to distribution income. So I would recommend using this screen to process distributions.

Thanks, again Andrew, for replying.

I think I’m going to have to raise a support call.

I’ve read the help documents, I’ve watched the videos, but they all don’t include a final distribution where the payment date is after 30 June.

When I have one, I get cash imbalances, and can’t complete the process. If I go t post accruals, they come up with red exclamations and negative numbers (due to the last missing payments).

Andrew, I got there in the end - I think the issue was related to opening balances. For a holding which was purchased in a tax year, it worked perfectly, but for one held in the starting year for the trust (so when there was an opening balance, and therefore an accrual from the prior year), the opening balance set up when setting up the trust throws it out.

Thanks again for your help.