Client Services
Frequently Asked Questions:
Annual Tax/Capital Gains Statements
Annual Tax Statement
- What if I sold units during the year?
- What other information can help me with my tax return?
- What is a distribution?
- What are tax-deferred amounts?
- Why are the discount capital gains and CGT concession amount not equal?
- Why is my management fee rebate assessable?
- Can I use e-tax?
- What if I'm not an individual taxpayer?
Capital Gains Tax Statement
- What is capital gains tax?
- What is the FIFO method?
- When do I have a disposal for tax purposes?
- What are the different types of capital gains on my statement?
- Why are there no totals for certain types of gains?
- What is the capital gains tax concession?
- Why are there multiple versions of my Capital Gains Tax Statement?
- What if I'm not an individual taxpayer?
Annual Tax Statement
What if I sold units during the year?
If you disposed of any units during the year, you will receive a Capital Gains Tax Statement along with a separate Guide to your Capital Gains Tax Statement to assist you in completing your tax return.
What other information can help me with my tax return?
The Australian Taxation Office (ATO) has a helpline for personal tax enquiries, which is 13 28 61. In addition, the ATO has a number of publications which will help you understand what you need to do to complete your return:
- 2009 TaxPack;
- 2009 TaxPack Supplement;
- You and your shares 2008 (NAT 2632-6.2009);
- Guide to foreign income tax offset rules 2008-09 (NAT 72923.2009); and
- Personal investors guide to capital gains tax 2009 (NAT 4152-6.2009).
- These publications are available from the ATO website or by telephoning the ATO on 1300 720 092.
What is a distribution?
A distribution from a managed fund represents your share of the income earned by a fund. Each fund may earn different types of income, for example dividends, interest and realised capital gains. Additionally, the income may be Australian sourced or foreign sourced. The funds are structured as unit trusts which means the types of income earned by the trust retain their character when they are distributed to you. The components of the distributions you received are detailed in Part C of your Annual Tax Statement. The components required to complete your tax return are shown in Part A of your Annual Tax Statement.
What are tax-deferred amounts?
Your distributions may include a tax deferred component. Any such component is detailed in Part C of your Annual Tax Statement, under "Other non-assessable amounts". The tax deferred component generally arises from capital allowances and depreciation amounts received from Listed Property Trusts. The tax deferred component is not included in your tax return for the year. However, the amount received reduces the cost base of your units in the fund, meaning that the amount is assessed as part of the capital gain when you eventually sell your units.
Why are the discount capital gains and CGT concession amount not equal?
The funds are eligible for the 50% capital gains tax concession. It could therefore be expected that the amount of discount capital gains and the CGT concession amount would be equal. However, from time to time, the funds receive distributions from Listed Property Trusts where the amount of discount capital gains and the CGT concession amount are not equal. As the components received by the fund retain their character when they are distributed to you (see "What is a distribution" above), this results in the discount capital gains and CGT concession amount being unequal.
Why is my management fee rebate assessable?
When a fund calculates the amount of income distribution, it takes into account a tax deduction for management costs charged to the fund at the rate which is detailed in the Product Disclosure Statement (PDS), which is reflected as a lower taxable distribution payment. When you receive a management fee rebate, the amount is assessed to tax in order to offset the larger tax deduction claimed by the fund. The effect of these transactions is that the net tax deduction (deduction in the fund less your assessable rebate) is equal to the net management fee charged to you.
Can I use e-tax?
The ATO allows you to prepare and lodge your tax return online, using e-tax which is available for download from the ATO website, www.ato.gov.au. The information provided in Part A of your Annual Tax Statement can be used to complete the worksheet in the section titled "Managed Funds" which is located in the "Income" section of e-tax. You should carefully read the instructions applying to the "Managed Funds" section, as there are circumstances when this section should not be used.
What if I'm not an individual taxpayer?
The information provided in this guide assumes you are an Australian resident individual taxpayer. If your investments in Vanguard funds are made through a Trust, Company or Superannuation Fund, you may need assistance from your accountant or tax adviser in the completion of your tax return. Tax return references relate to the tax return for individuals 2008 (supplementary section).
Taxation considerations are based on current laws and their interpretation at 1 July 2008. This information was prepared in good faith and we accept no liability for any errors or omissions.
Capital Gains Statement
What is capital gains tax?
Capital gains tax (CGT) applies to certain types of assets (generally including shares or units) that you sell. It affects your income tax liability because your assessable income includes your net capital gain for the income year.
What is the FIFO method?
The FIFO method is a way of matching units you have disposed of with units you purchased. It assumes that the first units you purchased are the first to be disposed of. You are not obliged to use the FIFO method when calculating capital gains. However, the Capital Gains Tax Statement is based on this method, and if you choose not to use FIFO you will not be able to use the calculations provided by Vanguard in the Capital Gains Tax Statement for this or any future year. If you choose to use a method other than FIFO, you will need to maintain your own records relating to the cost base of your units.
When do I have a disposal for tax purposes?
The Capital Gains Tax Statement assumes that each redemption, switch or transfer of units is a capital gains tax event. If you determine that capital gains tax does not apply to a particular transaction, you will not be able to use the calculations provided by Vanguard in the Capital Gains Tax Statement for this or any future year. If this is the case, you will need to maintain your own records relating to the cost base of your units.
What are the different types of capital gains on my statement?
Short gains: are capital gains realised on units held for less than twelve months. FICB gains: are gains on units purchased prior to 21 September 1999, adjusted for increases in the Consumer Price Index (CPI) up to 30 September 1999. Discount gains: are gains on units held for more than 12 months.
Why are there no totals for certain types of gains?
There are circumstances where you have a choice of capital gains tax methods. Where a gain is eligible for treatment as an FICB gain and also qualifies for treatment as a discount capital gain, you may choose the method which gives you a better outcome. You may make this choice for each parcel of units you have redeemed. For this reason, you may only calculate the total for each method once you have determined your choices for each parcel of units. You will need to calculate the total for FICB gains and discount gains manually.
What is the capital gains tax concession?
Where a gain qualifies as a discount capital gain, the law allows the taxable gain to be reduced by 50% for individuals. This means that tax is only paid on half of the capital gain.
Why are there multiple versions of my Capital Gains Tax Statement?
As a courtesy to investors, Vanguard provides capital gains tax statements for four types of taxpayer - individuals, trusts, superannuation funds and companies. This is because the calculation rules for each type of taxpayer are different. As we have assumed you are an individual taxpayer, you will need to use Part 1 of your Capital Gains Tax Statement.
What if I'm not an individual taxpayer?
The information provided in this guide assumes you are an Australian resident individual taxpayer. If your investments in Vanguard funds are made through a Trust, Company or Superannuation Fund, you may need assistance from your accountant or tax adviser in the completion of your tax return. Tax return references relate to the tax return for individuals 2008 (supplementary section).
Taxation considerations are based on current laws and their interpretation at 1 July 2008. This information was prepared in good faith and we accept no liability for any errors or omissions.