Hi all,
When my tax info was pre-filled, it also included an amount from "THE TRUSTEE FOR BETASHARES NASDAQ 100 ETF".
My only investment is 100% into NDQ via Commsec Pocket. How can I check the verify the amount is correct?
The only place I've looked is in my 2023-2024 summary on the Commsec website under the "interest and estimated dividend summary" and the amount there is significantly lower than what's pre-filled on ATO.
Don't have an accountant so I will be going through all the avenues (reddit, ozbargain, whirlpool, facebook groups).
These prefills are almost always correct.
99.999%?
That sounds like almost to me.
99.99904957%
Yes I agree but I'm just curious and so far my checks have not verified it.
Yes I agree but I'm just curious
Just to clarify - are we still talking about your tax return?
yes
My pre-fill had errors several times in the last 5 years leading to ATO interest and penalties. Since then, I always verify with the financial institution.
More to the point, the ATO are almost always going to question why the number was changed from the prefill (i.e. the amount they have on file).
Unless there's a real amount of money involved, getting the company to correct the issue, reissue the tax forms and updating the tax return isn't really worth the hassle.
OP, don't you get a separate financial statement from betashares ETF?
Try on Link Market Services
Thanks, this revealed some more information but still I cannot find the exact number that was pre-filled on ATO when looking through all my tax summaries on Link Market Services.
You should have got a detailed report outlining the amount you were paid, capital gains, foreign tax paid etc.
Betashares would have a contact. Contact them asking how to obtain the details or if they can send it directly to you.
Betashares send you a tax statement every year that has all the details that go into your tax return. Check your email.
BetaShares manage/own/run (choose your term) NDQ.
Betashares would have emailed or posted a tax statement for the FY. You need to tick "managed funds" on your tax return where it asks where your income comes from so that the prefill is correct.
If you haven't received these things it's because you haven't done the admin work at Link Market Services who are the share registry for Betashares.
NB: the payment you get from NDQ/Betashares is not a dividend. It is a managed fund distribution.
This is not meant nastily at all but is the umteenth example we've had on here of folks putting their hard earnt $$$ into a financial product when they clearly aren't 100% across how the product works. Not end of world but is best practice to read up on ETFs or whatever before investing rather than figuring it out when you're already pot committed.
ATO prefill is pretty much on the money, very rare they're off and even less that it's significant. If you have decent money in ETFs or shares its well worth having an account with Navexa or Sharesight to track returns & assist with tax strategies e.g selling off some of your NDQ but not all - you can significantly change your returns by applying different tax startegies to the parcel sold (FIFO or LILO etc).
As said by others you can login to the share registry and get your AMIT statement, but you would have been emailed this already but you must have discarded. - This has the info in it that the ATO is using.
Investing is great but getting the paperwork etc right makes things a LOT easier - is a major PITA to have to go back a bunch of years to do this and can be very costly on missed deducations etc.
This is the 3rd year I've been investing into ETFs. I will be tracking it now.
What do you recommend should be my next step? I will make an account with Navexa or Sharesight. Is one recommended over the other?
Yeah you're going to have to backdate the info - but both platforms offer integration that will do that direct from your broker, so should be pain free.
Personally, having tried both I prefer Navexa - tad cheaper, are always improving their product and is a very hungry product team. I think both have free trials, give both a whirl and see what works for you.
But good records are CRITICAL, FWIW I did the same as you myself many, many years ago so very easily done.
Would those services help where one has years of dividend reinvestment plan shares?
@kiitos: @kiitos
Funny you say that as I know from experience that YES they both are excellent at this. Long story short my wife got some NRMA/IAG shares from when they floated back in early 2000's, was on the DRS from then - I overlooked the reporting side - had to do ~20yrs of figuring out asset price etc for the end CGT when she sold her parcel.
Was done super easily through navexa, though SS would have worked as well. They're both excellent at importing old data or mapping out how such things as historical DRS would have worked out for future sales.
I was expecting a nightmare of work but I think it took nuder an hour, never used that account again - as no other buys in my wife's name but very easy so you should be fine. :-)
I have tired both. Sharesight seems better to me and is free
@sammm
Point understood but you simplify things a tad - SS has a free version, Navexa has no free versions, but they do give a trial. The free version of SS is pretty darn useless for anything other than performance tracking at a basic level - as every decent tax report is only on the pay versions - all of which are significantly pricer than Navexa.
If you say one is better - is handy to state the specific basis for this as is it the colours or a specific report etc. :-)
@Daniel Plainview: I don't know what I'm missing out on, but I'm not paying anyone a cent that I could have been invested in the ETF.
I despise that everything is so complicated that people feel the need to pay for whatever these tools are, or tax agents, or managed SMSFs etc.
@Daniel Plainview: It's worked okay for the 15 years I've had a SMSF, I think I'll be okay, but thanks.
the amount there is significantly lower than what's pre-filled on ATO.
How much is "significantly lower"? -20%? -30%? -50%?
As mentioned, the pre-filled data is generally correct IME when it comes to ETF distributions (I guess the gov is efficient when it comes to collecting taxes). It's a waste of time to try and figure out how they came to the figure, but if you really want to check you just need to get your NDQ tax statement from Link Market Services, then you can do some simple calculations to land on their amount to understand how they came to it. I can't remember the exact tax labels the numbers are calculated on (e.g. 18H, 13U etc.) but you can figure it out pretty quickly using trial and error.
Because of the stupid way the tax laws are written, and as a consequence the way that Aus ETFs are designed, the amount of distribution you actually get paid into your bank account is not the same as what you get taxed on.
For the ATO's purposes, the NDQ distribution is made up of: Australian income, foreign income, capital gains and AMIT gross-up amount.
Assume each of these four components is $10.
Australian income of $10 and foreign income of $10 is directly added to your taxable income. Foreign income will have had US tax paid on it already, let's say the US tax is $1.50.
Capital gains comes from the internal trading of the ETF. It's usually 50% discounted because the ETF will try to sell shares it has held for more than 12 months (how long you personally held the ETF is not relevant here). So your $10 gain is halved and $5 is added to your taxable income.
Lastly your AMIT cost base is increased by $10, that means you are taxed as if you received $10 and used it to buy more shares. When you eventually sell, you "get it back" in the form of reduced CGT.
So your taxable income is $10+$10+$5+$10 = $35, however the amount of distribution paid to your bank account is $10+$8.50+$10+$0 = $28.50.
You've already "paid" $1.50 of tax to the US so the amount of tax due to the ATO (on your total income) is reduced by $1.50. This is the FITO. If it is over $1000, you need to use the FITO rules to work out how much tax you would need to pay in Australia if you had no foreign income, and only the amount of extra tax attributable to the foreign income gets offset.
Sometimes the AMIT cost base is decreased, so you get more distribution now but when you sell you have to "pay it back" in the form of higher CGT.
Imagine how much time was wasted by accountants and ATO coming up with all this rubbish and having to calculate it every year for every ETF, instead of spending their time doing something more productive.
Thank you. This was a very helpful read. Good to know that if it's annoying and professionals struggle with this, then I don't need to worry about it as much.
Well I'm not a professional and I don't think accountants struggle with it. It's not that difficult to understand if you put some effort in, but for me the question is why is the whole country wasting time on making things needlessly complicated.
As a individual investor the main thing you need to do is keep track of the AMIT cost base adjustments, because when you sell it's not a simple calculation of amount you sold for minus amount you bought for, and this doesn't get prefilled because you have a choice about the order of units you sell and so it's impossible for the computer to work out.
As a individual investor the main thing you need to do is keep track of the AMIT cost base adjustments, because when you sell it's not a simple calculation of amount you sold for minus amount you bought for, and this doesn't get prefilled because you have a choice about the order of units you sell and so it's impossible for the computer to work out.
Bingo! This is where as a long term ETF investor it's odd as they're such a common asset class yet, which regular folks buy and sell all the time. But very few seem to know of the importance of the AMIT statements, specifically yes as far as the cost base adjustments go.
Accountants etc do this stuff in their sleep - all prepopulated for them by their pro grade systems - some hard corers will do on a spreadsheet but I think SS or Navexa are pretty good compromises and allow you to do your return very easily - also very handy for insights into your investing habits - honest self assessment is critical to long term success - don't be lazy and assume if you made money you're a genius & if lost you're a dud - is far more nuanced.
Please consult your accountant or the nearest ozbargain forum member.