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Classifying Trust and Non-trust income in Holding Settings

Could someone help clarify categorizing holdings as having Trust or Non-trust Income? There seem a number of questions on this.

For example, clarifying how standard LICs should be treated versus ETFs. I understand the concept is Trusts must distribute all income, Non-trusts can retain and decide what they distribute. Or is it more complicated and need to be sorted on a stock by stock basis?
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  • Hi,

    Income derived from trusts which includes ETF's and Managed Funds, but not LIC's is treated as trust income. We try and default payouts as non trust and trust based on the underlying entity as best we can.

    Income derived from companies which includes LIC's is treated as non trust income.

    If our default allocation is incorrect, you can elect to change a holdings income type from non trust to trust or vice versa.

    We also allow you to default individual payouts as trust or non trust income which can be particularly useful in the case of stabled securities that are generally made up of trust and non trust entities and typically distribute dividends that contain trust and non trust components.

    It's important to get the payout type correct for dividends and distributions because this allocation determines which section the payment appears on the taxable income report and ultimately how you report your taxable income to the ATO.

    The rules around which tax year a payment falls into is also different depending on whether the payout is from a trust entity or non trust entity.

    I hope this clarifies things a little.
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