Profit allocation for Trusts will be finalised via the Distribute Profit screen in Simple Invest 360.
There are two methods to allocate profit for a Beneficiary Trust:
- Proportionate Method
- Income Streaming
Whereas, in Unit Trusts, profit is distributed in proportion to the unit holders’ unit balance.
|Navigate to Compliance from the Main toolbar|
|select Period Compliance|
Select the Distribution Frequency. You can select between yearly, quarterly or monthly Profit/Distribution calculations. Alternatively, select Other to be able to specify your desired period.
Click Start Workflow for the selected Entry Period.
As part of the Workflow, the Calculate Taxable Income screen will prompt, displaying a breakdown of items in the calculation of taxable income, allowing users to add adjustments where needed. Change the Tax Labels, where applicable.
In the next stage of Distribute Profit, the Earnings Breakdown will display with Earnings available for distribution showing as the subtotal.
For Beneficiary Trusts, beside Income Streaming:
- Toggle to utilise the Proportionate method of Profit Allocation
- Toggle to utilise the Income Streaming method of Profit Allocation
Users can process the distribution by entering the Distribution Amount (% or $) to the beneficiaries.
Basic information of the beneficiaries and the LY Distribution from the last Financial Year will also display.
Once the distribution has been entered, the system will also calculate the closing retained earnings to be carried forward to the next financial year.
Additional Options - Unit / Hybrid Trusts:
For Unit Trusts, users have the option to process the distribution by entering the Profit Amount (% or $) for each unit class.
Once entered, this will automatically populate the Distribution Amount for each beneficiary based on their unit holdings. The distribution amount details cannot be edited and will be locked on screen.
The option to Reinvest distributions is also available for Unit Trusts:
Once toggled on, users can enter units for each member, distributing additional units to beneficiaries.
Note: Users can hover the cursor beside beneficiaries to reveal the Edit iconto update beneficiary details.
After the Distribution Amount has been filled in, users are able to further update Tax Components based on the total Taxable Profit Available for Distribution.
- Note: Where there is an overall loss or taxable loss, this section will be locked.
Users may scroll to the right to reveal full components:
Select to open the full list of tax components
Select/Unselect items to directly update the columns in the Tax Components section.
Note: Some components such as Franked Distribution cannot be deselected by default. These items can be noted by the lock icon.
Tax Components will only be calculated and shown in the Tax Return on the final year-end profit allocation (30/06).
1. Autofill from Distribution Percentage
Select to automatically populate the tax components based on the Distribution Percentage.
2. Manually Update Tax Components
Users are also able to manually update individual components.
Consider the Assessment Code between beneficiaries and residual accounts.
Select the icon for Share of Income of Trust Estate (W) to display total of Net Taxable Income or Net Accounting Income.
Note: The Franking Credits (D) column will be locked from editing and will be automatically updated in proportion to Franked Distribution (U). However, users may select the to edit these figures should they wish.
Residual = Total - Individual Components
3. On-screen calculator
Users can perform mathematical calculations directly on screen:
Once completed, select
System journals will differ depending on the specific profit/loss scenarios.
For more information regarding the system journals posted, click here.
Tax journals and Tax components for distributions will only be posted in the final segment of the Financial Year or when calculating Profit/Loss for the entire Financial Year.
Reprocess Profit and Tax Distribution
System journals posted for earnings and tax distribution will be locked in the Transaction List.
To update the distribution, return to the Distribute Profit tab in Period Compliance.
Users are able to update the distribution details on screen.
Once clicking the system journals will be re-posted accordingly.
To remove all system journals posted from the Distribute Profit screen for the current financial year, select Reverse FY 20XX System Distributions on top of the screen
Beneficiary Balance Summary
Listed under the Financial Reports section, the Beneficiary Balance Summary Report is now available, enabling users to have an overview of the movements in the Beneficiary balance. This report will summarise the Profit Distribution processed from the Distribute Profit screen, as well as information regarding Capital Contributions, Loans, Gifts, and any Drawings over the selected period.
Beneficiary Distribution Summary
Listed under the Work Paper Reports section, the Beneficiary Distribution Summary is now available. It will summarise the Profit Distribution processed from the Distribute Profit screen, with a comprehensive breakdown of the Tax Components.
For how to access the reports, please refer to Reports in Simple Invest.
Manage the Profit/Distribution workflow by using the Timeline.
The Timeline will allow you to select the previous period in the Financial Year.
Selecting a previous period will allow you to Reverse Period if you ever need to reprocess the Profit/Distribution calculation. Simply click .