Seeking guidance re Vanguard Lifestrategy Balanced Fund

Hoping I can obtain some guidance please?

  1. An SMSF which I’m attempting the accounting for, using Simple Fund 360, made an investment during the 2020 financial year of AUD 5,000 in Vanguard’s Lifestrategy Balanced Fund.

  2. I have the information from Vanguard, including transaction statements and AMMA Tax Statement, for the year ending 30 Jun 2020.

  3. The Tax Statement helpfully lists the relevant Tax Return Label alongside the Tax Attribution Amounts. Details as follows. I’ve excluded ant information which has a zero $ value.

  • Share of income from trusts, net less capital gains, foreign income and franked distributions | $23.84 | 13U
  • Franked distributions from trusts | $26.24 | 13C
  • Share of franking credits from franked dividends | $11.78 | 13Y
  • Net capital gain | 89.27 | 18A
  • Total current year capital gains | 178.54 | 18H
  • Assessable foreign source income | 27.97 | 20E
  • Other net foreign source income | 27.97 | 20M
  • Foreign income tax offset | 2.98 | 20O*

Label 20O makes reference to a note which states “If your total foreign income tax offsets from all sources for the year is $1,000 or less then you can claim this amount in full. Otherwise, you will need to refer to the ATO publication “Guide to foreign income tax offsets” (NAT 72923) to work out your entitlement.”

  1. If I was completing the accounts or tax return for an individual, then presumably this ATO guide would be useful to figuring where to place the various amounts in a tax return. However I’m not competing the accounts for an individual, hence my problem.

  2. Is there an information sheet or other guide as to what accounts I need to set up within BGL to accommodate each of the amounts on a Lifestrategy Balanced Fund Tax Statement?

  3. In trying to nut this out, I came across Distribution Tax Automation. Would this enhancement help me? Is this enhancement included in the cost of Simple Fund 360? (I don’t subscribe to the Bank or Share Data Packs as I don’t need them).

Any tips and help much appreciated.

Hi Steven,

I have made the following notes in regards to your query and hopefully they will be of help to you.

In Simple Fund 360, managed funds are normally set up as 74700 account. When you create this investment, the corresponding distribution(23800) account will be created automatically.

Unfortunately, this investment is not supported in our distribution tax automation screen. In other words, you would need to manually process this distribution. Please note there will be no fees involved in using distribution tax automation function if you have other investments supported in this function.

To manually process a distribution, you would need to enter the components in the statement to corresponding more details panel under the 23800 account. Under our 23800 account more details panel, you will be able to see the name of the fields are matching with components in your statement. Once you complete entering components and proceed to the Create Entry stage, our system will map all the components to the corresponding fields in SMSF annual return automatically. Also, the FITO treatment will be included automatically in tax return calculation as well. I have included a few articles below for your information.

Please feel free to let me know if you need more help in this.

Hi Steven
You have Part A - as you said, it’s helpful for an individual return. For accounting purposes you will need Part B (and maybe C/D, depending on the provider) so you can enter the attributed amounts and reconcile to the cash totals. Part B is usually on the next page or two.

This specific section should be most helpful to you:

Annual/AMMA Tax Statements - Where to enter in More Details panel:

It takes some time to understand how to enter the tax data and not all tax statements are the same format, which makes things even more “enjoyable”.

Ah yes. I do have Part B also, CAXSB. As you say, page 2 of 2.

In hindsight, I shouldn’t have put these small amounts into Vanguard funds. Live n learn I guess. I think the best thing for me to do is have somebody add all of these entries for me, so I can follow the pattern in subsequent years.

Do you have any interest in quoting for this please CAXSB, or is there anybody else reading have an interest? Pleas feel free to private message me if so.

Thanks JYSUPER. As per my reply to CAXSB, I’m now interested in getting this done. Proving too stressful! :slight_smile:

It’s just a matter of making sure you have all the distribution income recorded for the year, then entering the tax components.

  1. Most managed funds will pay a distribution after 30 June so you need to post a journal entry at 30 June to bring this in as income:
    Dr 61800/VAN00…
  2. Then to enter the tax statements I go to Compliance > Distribution Tax Automation. The managed funds are listed, and you can expand each total to show the individual amounts. Check the total agrees to the total cash income (if it doesn’t this needs to be fixed first), then expand and head over to the far right Taxable Income column where a pencil will appear - click this for the data entry screen. Here is where you enter the numbers from the Tax Statement.
    a. You can do calculations within a field which is handy
    b. Capital Gains is invariably shown using 50% discount and you need to move the slider to get this right
    c. If the tax statement is actually an AMMA or AMIT use the numbers in the attribution column
    d. It tells you down the bottom if there is a difference.
    When done, you can save and mark as reconciled.

I remember when I first started using Simple Fund Desktop back in 2012, I didn’t have this much support material and automation and had to work it out myself on how to input it correctly.

Here are my tips:

  1. Take advantage of the Distribution Tax Automation screen when they data is available as CAXSB has mentioned.

  2. If you input all the tax statement data correctly, the Net Cash Distribution figure should match with the figure on the annual distribution tax statement.

  3. Some tax statements will require opening up excel as not all show the Net Cash Distribution but this is rare.

  4. For AMIT tax statements - input the Tax Attribution figures.

  5. If there is a AMIT cost base adjustment shown on the tax statement, you usually don’t have to input the tax deferred, exempt, non-assessable amounts shown on the same statement.

If all else fails, and the figure is not materially incorrect, I wouldn’t waste more time on reconciling the tax statement.