Suncorp Easy Invest Tax Guide for the year ended 30 June 2013
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Suncorp Easy Invest
Tax Guide
for the year ended 30 June 2013
ATax policies and general assumptions
This Tax Guide provides information on the tax policies and assumptions used,
and the information the Operator has relied upon, to prepare the Tax Report
– Summary (Summary Report) and the Tax Report – Detailed (Detailed Report) in
order to determine how amounts received should be treated for taxation purposes.
It will help you in the preparation of your income tax return for the year ended
30 June 2014.
Third Party Access Our dedicated Suncorp Easy Invest tax website contains
Suncorp Easy Invest clients can grant their accountant, detailed tax information relating to tax reporting including:
self-managed superannuation fund (SMSF) administrator ■■ information explaining tax technical concepts in
or other financial representative secure access to view more detail
and download reports for their Suncorp Easy Invest ■■ soft copies of this guide
account, normally only visible to their adviser. ■■ glossary of terms
With direct access to account reporting, their ■■ Australian Taxation Office (ATO) links and resources.
financial representative will have the information at
their fingertips to complete their client’s end of year To access the Suncorp Easy Invest tax website please
accounting paperwork. go to macquarie.com.au/easyinvesttax
Suncorp Easy Invest is an Investor Directed Portfolio Service operated by Macquarie Investment Management Limited ABN 66 002 867 003 AFSL 237492 (MIML).
MIML is not an authorised deposit-taking institution for the purposes of the Banking Act (Cth) 1959, and unless otherwise specified in the offer documents,
MIML’s obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542. Macquarie Bank Limited does not guarantee
or otherwise provide assurance in respect of MIML’s obligations.
Investments made through Suncorp Easy Invest are not deposits with or other liabilities of Macquarie Bank Limited (MBL) ABN 46 008 583 542 or of any
Macquarie Group company, and are subject to investment risk, including possible delays in repayment and loss of income or principal invested. Neither MBL,
MIML, nor any other member company of the Macquarie Group guarantees the repayment of capital or the performance or any particular rate of return of the
investments purchased through Suncorp Easy Invest.
The facilitator – Suncorp Life and Superannuation Limited ABN 87 073 979 530 AFSL 229880 (Suncorp), promotes the portfolio administration service offered
by the Operator. Neither Suncorp, Suncorp Metway Limited ABN 66 010 831 722, nor any of the Suncorp Group of companies guarantees the repayment
of capital or the performance or any particular rate of return of the investments purchased through Suncorp Easy Invest. Investments made through Suncorp
Easy Invest are not deposits with, or other liabilities of, any Suncorp Group company and are subject to investment risk, including possible delays in repayment
and loss of income or principal invested.
Suncorp consents to the inclusion in this Tax Guide of statements about it in the form and context in which those statements appear and has not withdrawn
its consent before the date of this Tax Guide. Suncorp takes no responsibility for the issue of this Tax Guide or for any information included in it, other than
the statements about Suncorp and Suncorp Group entities.
This document has been prepared as a general guide only. This is not personal advice. This Tax Guide has been prepared without taking into account
your objectives, financial situation or needs. Therefore, before preparing an income tax return, you should consider the appropriateness and relevance of
the Tax Guide, taking into account your specific circumstances. The Operator recommends that the general assumptions and tax policies section are read
thoroughly because in some instances the policies applied may not be applicable to your specific circumstances and if this is the case, particular amounts
may need to be recalculated using other reports available.
The Operator strongly recommends that your income tax return is prepared in conjunction with advice from an accountant or tax adviser. This Tax Guide
covers the tax policies and assumptions in which the Operator has relied upon in preparing your Tax Report – Summary and Tax Report – Detailed but should
not be relied upon as a substitute for professional taxation advice.
2Tax policies and general assumptions
Summary Report fund is a fixed trust as defined and hence not precluded the
Your Summary Report provides you with a summary of your flow through of any franking credits. We recommend you
taxable position in respect of your account for the year ended seek independent taxation advice to confirm whether our
30 June 2014. It provides: treatment is appropriate to your circumstances.
■■ consolidated tax information required to complete your
■■ The Foreign Investment Fund (FIF) provisions have been
income tax return repealed and at the time of writing this guide, have
not been replaced. It is anticipated that the Foreign
■■ references to ATO tax return labels for individuals, trusts
Accumulation Fund (FAF) provisions will soon be enacted.
and SMSFs
We recommend you seek independent taxation advice
■■ references to the Detailed Report so that you can in relation to the treatment of any attributed income
determine how amounts disclosed in the Detailed Report amounts which you may be entitled to.
are used to arrive at the amounts disclosed in your ■■ Legislation has been enacted that removed the 50%
Summary Report.
capital gains tax (CGT) concession for non-residents on
Detailed Report capital gains accrued after 8 May 2012. Where you are
a non-resident investor for Australian tax purposes, you
Your Detailed Report provides you with a detailed breakdown, may need to determine your CGT position taking this into
on a distribution basis, of all income that you have derived account. We recommend you seek independent taxation
for the year ended 30 June 2014. It also contains information advice to determine the most appropriate treatment for
about any asset disposals and any expenses that you have your circumstances.
incurred throughout the year.
The Detailed Report has the following sections:
■■ Cash (C)
1. Cash (C)
■■ Managed Funds (T) Cash income reported includes distributions from your
Suncorp Easy Invest Cash Account (Cash Account) and any
■■ Other Income (O)
interest refunds from margin loans.
■■ Disposal of Capital Items (R)
Cash Account income is included as assessable income on
■■ Excess Assessable Gains (X) the date the income is paid.
■■ Denied Franking Credits (DF) Any interest refunds on margin loans are included as
■■ Fees and Expenses (F). assessable income based upon the date of payment of
the interest. The amount of interest refunded in respect of
Your Detailed Report will always disclose the Cash (C) and
your margin loan is the amount provided by your margin
Fees and Expenses (F) sections but will only show those other
lender. Should this not reconcile to information you have
sections of the Report that are relevant to your account.
received from your margin lender, please contact your margin
Your Detailed Report will therefore not disclose sections where
lender directly.
your investments either did not distribute assessable income
or were not disposed of during the year. Also disclosed is the amount of any tax withheld where
you have not provided a Tax File Number (TFN), Australian
Additional information provided at the end of your Tax Report
Business Number (ABN), an exemption reason or you are a
contains the key assumptions explained in this guide.
non-resident.
Legislative developments and other relevant matters
■■ The Taxation of Financial Arrangements (TOFA) regime 2. Managed Fund Income (T)
began on a mandatory basis from 1 July 2010 for certain Managed fund income reported may include distributions of:
taxpayers. Taxpayers can elect to apply this regime where ■■ Interest
they do not satisfy the eligibility criteria. The Operator
has not considered the application of this regime to your
■■ Dividends
account on the assumption that one of the exclusion ■■ Capital gains
criteria has been met and you have not elected for the ■■ Foreign income
TOFA regime to apply to your account. We recommend ■■ Other income
you seek independent taxation advice to confirm whether
or not this regime applies to your account.
■■ Franking credits (including Trans-Tasman imputation credits)
■■ The Operator has continued to rely on information provided
■■ Foreign income tax offsets
by product issuers regarding the income flowing through ■■ Non-assessable amounts (such as tax free and tax deferred/
unlisted managed funds on our investment menu. Further, return of capital amounts)
we have not made any determinations as to whether any ■■ Expenses paid.
3Tax policies and general assumptions
Income from managed funds is included as assessable Controlled Foreign Companies (CFCs)
income on an accruals (present entitlement) basis. Any credits Your Tax Report separately reports any unrealised income
distributed through managed funds are disclosed separately that may accrue in relation to CFC investments as
under the applicable categories of credits. reported by the product issuer. If you have an investment
The Net Cash Distribution received has been grossed up in a CFC, the Operator recommends that you seek
to include TFN amounts withheld (if any) and non-resident independent taxation advice in relation to any specific
withholding tax deducted (if any). CFC taxation treatment.
Distributed capital gains Conduit Foreign Income
Any capital gains distributed to you by managed funds Any conduit foreign income that you have received
are disclosed in your Detailed Report on a distribution by from assets held in your account has been disclosed as
distribution basis. The distributed capital gain is doubled and Australian unfranked dividend income in your Summary
reported as a gross discounted capital gain. Your Summary Report. It is separately disclosed in your Detailed Report.
Report undertakes a net CGT calculation, which is limited by
the assumptions listed in section 4.
3. Other Income (O)
These amounts are to be used by you to determine your
overall CGT position that is to be disclosed in your income Other income includes any product issuer rebates to
tax return at the capital gains item. These amounts are which you may be entitled. Other income is included as
not to be included in the trust distribution section of your assessable income when amounts are paid.
income tax return. This is consistent with ATO guidelines
(readily available on the ATO website). Note however that 4. Disposal of Capital Items (R)
there is an ATO Interpretative Decision (ID) which states, on
a strict interpretation of the current tax law, these distributed In calculating capital gains (or capital losses) for
capital gain amounts are to not only be included in the your account, the Operator has made the following
CGT section of your income tax return but also in the trust assumptions:
distribution section with an accompanying deduction (equal ■■ you are an Australian resident for tax purposes
to the amount of the distributed capital gain) to ensure ■■ all investments held in your account have been
there is no double taxation. Given this discrepancy, we acquired as capital assets
recommend that you seek independent taxation advice to
■■ only investments held within your account have
determine the tax disclosure that is more appropriate to your
been included in your Tax Report.
individual circumstances.
Your Tax Report does not take into account:
Tax free and tax deferred/return of capital ■■ assets which are held outside your account
distribution amounts
■■ assets that have been included in the Portfolio
These components require adjustments to the cost base and/ Valuation Report as ‘below the line’ assets, such as
or reduced cost base (as relevant) of the asset. Any such retail managed investments
adjustments have been made as at the accrual date of
■■ any prior year losses or other carried forward balances.
the distribution.
Capital gains and capital losses have been calculated on
CGT concession amount a First In First Out (FIFO) basis. That is, the first parcel
The CGT concession amount relates to the non-assessable purchased has been deemed to be the first parcel sold.
CGT discount component distributed to investors by managed The Operator relies on the information provided by
funds. Such amounts are made through the sale of assets advisers and investors regarding cost base and acquisition
held for at least 12 months. Investors are not required to details in relation to assets transferred into the service.
adjust the cost base of their units for such amounts paid on The Operator makes no determination as to the accuracy
or after 1 July 2001. of the information provided.
Your Detailed Report separately discloses any CGT concession
amounts, as reported by the product issuer. However, as this
amount is non-assessable, it is not included in the calculation
of an investor’s net capital gain. As a result, this amount
will not be disclosed in the Summary Report. The Operator
recommends that you seek independent taxation advice in
relation to the appropriate tax treatment of these amounts.
4Tax policies and general assumptions
Types of capital gains Taxable Australian Real Property (TARP) vs Non-Taxable
There are three types of capital gains that you may derive. Australian Real Property (Non-TARP) Gains
These are: TARP capital gains arise where:
■■ an investor has a direct interest, or a more than 10%
1. Discounted capital gains
indirect interest, in a TARP asset
■■ These occur when you have held, or are deemed to have ■■ for indirect interests, the total underlying assets related
held, an asset for at least 12 months. to real property (by way of market value) are more than
■■ In this case, you are able to apply a discount that reduces the total value of the underlying assets not related to
the taxable amount of the capital gain. For resident real property.
individuals and trusts, the discount is 50%. For complying
Australian residents are assessed on both TARP and non-TARP
SMSFs, the discount is 33¹⁄³%. Companies and non-
capital gains they derive during an income year. Non-residents
residents are not entitled to any discount.
are only assessed and subject to final withholding tax on TARP
capital gains they derive during an income year (where the
2. Indexed capital gains
distribution is made through a managed investment trust).
■■ These occur when you acquired an asset prior to In addition, intermediaries (ie those entities which are residents
21 September 1999, and held it for at least 12 months. for Australian tax purposes but have non-resident investors)
■■ The “indexation method” allows the cost of the asset to may need to use TARP and non-TARP breakdowns to
be increased by an indexation factor that is based on the determine their own withholding tax obligations.
CPI movements up to September 1999. Where you have disposed of an asset you hold in the Service,
■■ Where this method is chosen, the discount method cannot the Operator has assumed that you do not hold a greater
apply. However, you may choose the method that gives than 10% interest in that asset and has disclosed the resulting
you the lowest capital gain. capital gain as a non-TARP capital gain.
Where you have received a distribution of a capital gain,
3. Other capital gains the Operator has relied upon the product issuer statement
■■ These occur when an asset has been held for less than for the TARP and non-TARP classification of the capital
12 months, and are calculated by simply taking the gains. The amount disclosed on your Summary Report
proceeds from the sale and deducting the cost base of reflects the disclosure provided by the product issuer. Your
the asset. Detailed Report does not separately identify TARP and non-
TARP capital gains. Instead, the amounts reported are the
Note that you may only have a capital gain or capital loss combined total of TARP and non-TARP gains distributed,
in respect of an asset that was purchased on or after 20 under the Distributed Australian Capital Gains section.
September 1985.
For any assets with an acquisition date prior to 20 September 5. Excess Assessable Capital Gains (X)
1985, they will generally be treated as a pre-CGT asset. Any
capital gain or capital loss will be disregarded and no gains or These arise where the following has taken place:
losses will be reported in respect of these assets. ■■ an entity has made payments of tax deferred and/or return
of capital amounts
■■ these non-assessable amounts have reduced the cost base
of the asset
■■ the cost base of the asset has been reduced to zero.
Where this has occurred, any further distributions of these
non-assessable amounts will give rise to an immediate capital
gain at the time the non-assessable distribution is paid or
declared, depending on the nature of the payment. Where
the asset is a unit in a managed fund, this type of capital gain
is known as an E4 capital gain. Note that you cannot make a
capital loss as a result of an E4 event.
Normal discounting rules or indexation may apply to reduce
the amount of capital gain. Where the relevant conditions
have been met, the Operator has applied the discount
method to reduce the amount of the capital gain. An E4
capital gain will be recognised on an accruals (present
entitlement) basis.
5Tax policies and general assumptions
6. Denied Franking Credits (DF) these fees in the Summary Report, as no determination has
been made in relation to their deductibility or otherwise. These
The Operator has applied the ‘45 Day Rule’, an anti-avoidance fees will be disclosed via a footnote in the Summary Report.
tax rule which denies certain franking credits, to your account.
In addition, the Operator has not applied the $5,000 de-minimis Government charges and administration fees
rule (the small investor exemption) to your account. Government charges and Administration fees have
The Operator has undertaken broad based calculations to been classified as fully deductible. You may wish to seek
arrive at the amount of denied franking credits disclosed, independent taxation advice as to the deductibility of these
having regard to the assumptions as stated below and the fees and charges.
limited information regarding your personal circumstances: Any stamp duty which has been incurred may need to be
■■ no consideration has been given to positions that may taken into account when determining your taxable position.
reduce the overall exposure to an underlying security We recommend you seek independent taxation advice to
by more than 30% for a particular distribution determine the most appropriate treatment.
■■ all assets are held at risk
Adviser fees
■■ all buys and sells between the dividend declaration date
and the ex-dividend date are cum dividend The tax treatment of these fees is determined by the nature
of the services provided by the adviser directly to you.
■■ there are no related payments.
As Suncorp has instructed the Operator that the Adviser fees
The amount of franking credits denied has been disclosed in are deductible, the Operator has reported Adviser fees in the
your Summary Report and in the Denied Franking Credit (DF) Deductible column of your Detailed Report.
section of your Detailed Report. The Operator has relied on your adviser’s instructions and has
The Operator recommends that you seek independent not considered whether the treatment is correct. You may
taxation advice in order to determine the appropriate wish to seek independent taxation advice in relation to the
treatment of these franking credits. treatment of these fees and discuss the appropriate treatment
with your adviser.
7. Non-Approved Assets Please note that any brokerage costs have been added to the
cost base of your assets, where applicable.
Due to circumstances outside of the Operator’s control, certain
Establishment fees have been treated as non-deductible.
events such as corporate actions may result in the acquisition of
assets that the Operator cannot reflect in the reports, such as Interest on margin loans
certain international or unlisted shares. In some instances, the
Operator may not receive tax information in a timely manner, Interest reported on your Tax Report in respect of margin
or at all. The Operator will use best endeavours to report tax loans has been provided by the margin lender and may
events as they apply to your account. Where you and/or your include prepaid interest (where applicable). The Operator has
adviser have been made aware, you should generally seek to assumed that the amount of interest on your margin loan is
monitor any events relating to these assets that may impact fully deductible.
your account. This may not be the case depending on your individual
circumstances and the Operator strongly recommends that
you seek independent taxation advice as to the deductibility
8. Fees and Expenses (F) and the timing of deductibility of interest on the margin loan.
Included in expenses on your Tax Report are: If you have changed your margin lender throughout the
■■ government charges year, interest shown on your Tax Report will only apply to the
■■ administration fees lender attached to your account as at 30 June 2014.
■■ adviser fees Please note that the amount of interest reported is the
amount provided to the Operator by your margin lender.
■■ interest paid on margin loans.
Should this, together with any refunded interest amounts
All fees reported include any applicable Goods and Services as disclosed in the Cash (C) section of your Detailed Report,
Tax (GST) unless expressly stated otherwise. To the extent not reconcile to the information you have received from
an input tax credit (or any portion of an an input tax credit) your margin lender, we recommend you contact your margin
is able to be claimed, the benefit of this will be passed on lender directly.
to you. To the extent that you have claimed a credit for the Where your margin loan is jointly held across two or more
GST reported on the expenses disclosed, the fees reported Suncorp Easy Invest accounts, please note that the Operator
may need to be adjusted depending on your individual equally splits the margin loan interest across those accounts.
circumstances. The Operator recommends that you seek independent taxation
Where fees have been reported in the Unallocated column advice in order to assess whether or not this split is correct and
of the Detailed Report, the Operator will not separately report make the appropriate amendments where required.
6Tax policies and general assumptions
9. No Tax File Number (TFN), Australian
Business Number (ABN) or Exemption
provided
If you have chosen not to provide your TFN, ABN or have not
notified the Operator of an exemption by the record date
of the distribution, tax may be withheld by the Operator
from assessable income received in respect of managed
investments, at the highest marginal rate plus the Medicare
Levy. If an amount has been withheld, it is disclosed on your
Tax Report. This amount may be claimed as a credit in your
income tax return.
10. Non-Resident Withholding Tax
If you are a non-resident, tax may be withheld on certain
income received from unlisted managed funds.
For unlisted managed funds, the Operator deducts a flat 15%
withholding tax against the gross cash distribution received
throughout the year and remits this to the ATO.
After year end, the Operator performs a reconciliation against
all assets held in your account. The Operator does this once
all income components of all assets held in your account are
known. The reconciliation is performed for all open accounts
comparing the amount that was withheld and the amount
that should have been withheld.
In performing the reconciliation, the Operator will take into
account the correct rates of withholding tax according to
the relevant Double Tax Agreement (DTA), for interest and
unfranked distributions. The withholding tax rate will be
15% for TARP capital gains and Australian other income
where you live in a country that Australia has an effective
Exchange of Information Agreement with. The rate will be
30% where you live in a country where no such agreement
has been negotiated.
Where too much tax has been withheld throughout the year,
a credit is made to your Cash Account.
Where not enough tax has been withheld, a debit equal
to the amount of the tax shortfall is made from your
Cash Account.
7Deloitte Tax Services
S Pty Ltd
ACN 092 223 3 240
Grosvenor Pllace
225 George Street
S
Sydney NSWW 2000
PO Box N2500 Grosvenor Placce
Sydney NSWW 1220 Australia
Tel: +61 2 93
322 7000
Fax: +61 93222 7752
www.deloitte.com.au
Commerrcial in Confidence
The Direcctors
Macquariie Investment Managementt Limited
1 Shelleyy St
SYDNEY Y NSW 2000
1 July 2014
Dear Direectors
Independdent Taxatioon Review: Suncorp Eassy Invest
Tax Guide
For the year ended 30 Jun
ne 2014
We have reviewed the above Tax Gu uide (“the Taxx Guide”) for Macquarie In
nvestment Mannagement Lim mited (“MIML L”)
for the yeear ended 30 June
J 2014. We
W have conduucted an independent taxatio on review to ddetermine wheether, in our
opinion, tthe Tax Guidee contains any
y material mis statements or omissions in relation to taxxation matterss.
This opinnion has been prepared for MIML
M to be ssatisfied that itt has obtainedd reasonable asssurance in relation to the
integrity of the Tax Guuide having regard to its oveerall responsib bilities and su
ubject to the coomments noteed below. No
responsibbility will be accepted
a for an
ny reliance onn the opinion to t any other person, or for aany purpose other than whicch
it was preepared.
Scope off Review
Our revieew of the Tax Guide has beeen limited to ddetermining th hat based on the informatioon that has beeen made
available to us, we are not aware of any material sstatement thatt is false or miisleading withh respect to thee technical
principless as advised by
b MIML and referred to in the Tax Guid de or any mateerial omissionss from the Tax x Guide. Thee
scope of oour review didd not extend to a review or testing of the systems, nor a review of thhe technical prrinciples beyoond
those discclosed in the Tax
T Guide.
Our revieew is based onn the taxation laws, rulings and administrrative practice of the Austraalian Taxation
n Office as at the
t
date of thhis opinion.
Statemennt
Based onn the review prrocedures outllined above, wwe are not awaare of any issu
ues that wouldd cause us to believe
b that thhe
contents oof the Tax Guuide for the yeear ended 30 Ju
June 2014 con
ntains a material misstatemeent or omission n.
Yours sinncerely,
Adele Waatson
Director, Deloitte Tax Services Pty Ltd
L
Deloitte referrs to one or more off Deloitte Touche Tohmatsu
T Limited, a UK private compaany limited by guaraantee, and its netwoork of member firms, each of which is a
legally separa ate and independent entity. Please seee www.deloitte.com
m/au/about for a de o the legal structuree of Deloitte Touche Tohmatsu Limited
etailed description of
and its memb ber firms.
Liability lim
mited by a schem
me approved un
nder Profession al Standards Le
egislation.
Member of D
Deloitte Touche Tohmatsu
T Limited
89
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