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ETF payments are reporting in the wrong tax year

Payments by ETFs I held during the 2016-17 tax year made after 30/6/2017 are showing in your (Taxtools) summary for that year. VanEck advise me that these should be shown as income for the current year 2017-18.
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  • I also have this issues but with some dividends received 3rd and 4th July
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  • Hi VanEck, My tax year is April 1st to March 31st. Purchases of some shares sold in the 2017 - 2018 Tax year were actually bought in the Tax Year 2016 - 2017 or prior. The dates I have used are the actual dates of these transactions? Are you saying this is this incorrect? Tony I am a new member trying to set up
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  • I'm talking about distributions made in July by Van Eck on ETF's that I purchased before the end of the last tax year. This is not about the date they were purchased, but when the payments were received, and for which year this income should be included.
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  • Hi Robin,

    Thanks for drawing this to our attention.

    We've been working on a number of developments in respect of our ETF dividends recently. As part of this work, we have been in discussions with Computershare who have provided us with end of year tax breakdowns for the 2016/2017 tax year.

    During this process they made it clear to us that dividends paid out in July 2017, usually with an ex date of around the 3rd July, should fall into the 2016/2017 tax year because the tax year for ETF's is based on when dividend income is earned and not when it is paid out.

    As such, we now display dividends with an ex date dated within the first few days after the end of the tax year as being included in the previous period.

    When we do this, we display a little info icon on the taxable income report alongside each dividend that falls into this category (for Australian portfolios only)

    I've taken a look at Van Eck and can see that their registry is Link Market.

    We are currently in discussions with Link Market about getting end of year tax breakdowns for all the ETF's they operate as the registrar for.

    I will raise this directly with them and see if I can provide some clarification.

    Certainly, if the Van Eck dividend's with ex dates in early July 2017 are supposed to be reported in the 2017/2018 tax year, then Van Eck does things differently to Computershare run ETF's.

    If you would be happy to provide some more specific detail about the ETF's in question that would be very useful. Just send a direct message to support@sharesight.com and mention this forum topic.

    I would be particularly interested to see what your Van Eck end of year tax statement looks like for 2016/2017 that I would imagine you received from Van Eck for each ETF you own.

    Regards
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  • Hi Ben,

    I have a similar issue, not with EFTs, but with listed Australian shares (eg ANZ) where the dividend was received 3rd and 4th of July but they do not appear in the 2017/18 tax report.

    I have only recently set up so I assume they would have appeared in the 2016/17 had I been set up then and the dividends i anticipate to receive early July this year will be included in the year ended 30 June 2018.

    My Commsec tax report includes them in the year of receipt, not the earlier year. Also, the accounting policy of my audited SMSF (which holds the shares) says "dividend income is recognised when received".

    A quick look at the Master Tax Guide says that dividends are received when taxpayer can draw upon the dividend. In the above cases the distribution was only credited in July, therefore belonging to the 2017/18 year (in my humble opinion!).

    Kind regards
    John
    • Hi Mack,

      As long as your ANZ dividend received on the 3rd/4th July is recorded as non trust income, it should be included in the 2017/18 tax year.

      The changes we've made should only impact on ETF's.

      If you open the dividend in question, you'll see Non-Trust income and Trust income radio button's along the top of the dividend.

      If it is currently set to 'Trust Income', try changing it to 'Non-Trust income'. You should see the dividend now included in the 2017/18 tax year.
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  • Hi Ben,

    They are recorded as non-trust so that was not the issue.

    However, thinking about it, i think the non-recognition in 2017/18 may be because i set up the whole portfolio as opening balances as at 30 June, 2017 (as it went back many years). As this is after the "record" and ex-div date for those particular shares I suspect sharesight did not recognise my shares were actually "entitled" to the dividends.

    In other words, a "once off".

    Kind regards

    Mack
    • Hi Mark,

      I think you've hit the mark on that one. Your right that using an opening balance as at 30 June 2017 will exclude any dividends if the ex date falls before this date.

      If you want to stick with that opening balance date, you will need to manually enter those missing dividends.

      As you mention, just a once off issue.
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  • Hi Robin,

    In relation to your original query about which tax year a distribution from Van Eck falls into, I have now sited a Van Eck end of year tax statement for the 2016/2017 tax year that clearly shows the following three distributions as being included in that tax year:

    The distribution paid out on 18th Jan 2017
    The distribution paid out on 21st April 2017
    and most importantly, the distribution paid out on 18th July 2017.

    Although we use the ex date in our report, you will see from the screenshot below that our logic includes these three distributions in the correct tax year. However, to ensure this is the case each distribution must be tagged as 'trust income' and the default income type for the holding itself must be set as 'trust income'.

    See below for the correct holding level setting for your ETF's:



    and the screenshot below that displays these distributions in the correct tax year:


    Regards
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