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GUIDE EXTERNAL JUNE 2016 UNCLASSIFIEDFORMAT AUDIENCE DATE CLASSIFICATION

FILE REF: [FILE NO.]

Annual investment income report (AIIR) companion guideVersion 2.1

UNCLASSIFIED For further information or questions, call 132866.

UNCLASSIFIED AIIR Companion Guide

VERSIONSVersion number Published1 (v1) November 20132 (v2)

Key changes between v1 and v2

Content updated to reflect updating the AIIR Electronic reporting specification from v10 to v10.0.1

A new section, Lodgment, has been included The Farm Management Deposit section has been updated to

explain consolidation and simplified reporting Section 11, Alignment between AIIR, SDS and ITR ,has been

updated to reflect alignment of the 2015 forms Division 393 of the Taxation Administration Act 1953 (TAA

1953) replaces regulation 56 of the Income Tax Regulations 1936 from 1 July 2015

October 2015

2.1 (v2.1)

Key changes between v2 and v2.1

Content updated to reflect updating the AIIR Electronic reporting specification from v10.0.1 to v10.0.2

Cyclic changes to reflect reporting year 2016 Section 3, Lodging nil returns updated to include future

reporting information Section 3, Lodgment and Section 4, Investor and account

reporting have been updated to include exploration credits Section 11, Alignment between AIIR, SDS and ITR has been

updated to include information on Attribution managed investment trust members annual statement

Appendix C, ATO lodgment validations - corrective action has been included

May 2016

UNCLASSIFIED PAGE 2 OF 116


TABLE OF CONTENTSTerms & Acronyms.......................................................................................................................61 Introduction................................................................................................................................9

Who should use this guide.......................................................................................................9How to use this guide...............................................................................................................9Regular updates.......................................................................................................................9Feedback...............................................................................................................................10

2 Legal requirements..................................................................................................................11Retention of Information.........................................................................................................11Other obligations....................................................................................................................12

Requirement to deduct non-resident withholding amounts.................................................12Withholding payer numbers.................................................................................................13Managed investment trust fund payments and withheld amounts......................................13Consolidated reporting........................................................................................................14Financial Claims Scheme....................................................................................................14First home saver account (FHSA).......................................................................................14Mergers...............................................................................................................................15

Example 2.1 – Merged before or after 1 July...................................................................15Example 2.2 – Merged on 1 July.....................................................................................15

3 Lodgment.................................................................................................................................164 Investor and account reporting................................................................................................23

Investor TFN..........................................................................................................................23Investor entity type.................................................................................................................25Reporting for different entity types.........................................................................................25

Individuals............................................................................................................................25Corporation or incorporated organisation............................................................................26Partnerships........................................................................................................................26Joint accounts......................................................................................................................26

Unequal shares in a joint account....................................................................................27Trusts...................................................................................................................................27

Example 3.1 – Formal trust with trust TFN......................................................................28Example 3.2 – Formal trust with trustee TFN..................................................................28

Superannuation funds.........................................................................................................29Government organisation....................................................................................................29Other non-individual............................................................................................................29Third party accounts............................................................................................................30

Example 3.3 –Third party account where the income is deemed to be the third party’s. 30Example 3.4 – Account opened by third party OBO an individual investor.....................31Example 3.5 – Account opened by third party OBO a non-individual investor................31

Payment type.........................................................................................................................32Payment dates.......................................................................................................................35

Example 4.6 – Multiple interest payments.......................................................................36Example 4.7 – Multiple franked dividend payments.........................................................36

Account signatories................................................................................................................36Example 4.8 – Additional signatory on an individual account..........................................36Example 4.9 – Office bearers as signatories...................................................................36



Substituted accounting periods..............................................................................................37SAP fields and rules............................................................................................................37

5 Deferred interest securities......................................................................................................40Identification of investments...................................................................................................40Reporting arrangements........................................................................................................41

6 Conduit foreign income............................................................................................................42Income declared to be conduit foreign income by Australian corporate tax entities..............42Trust distributions of income declared to be conduit foreign income.....................................42

7 Interposed entities...................................................................................................................44Example 7.1 – Primary investment body provides investor’s details to secondary investment body...............................................................................................................45

Non-resident interposed entities/investors..........................................................................47Entities not considered interposed entities.............................................................................47

8 Non-resident investor reporting...............................................................................................48Withheld amounts from non-residents...................................................................................49Residency status....................................................................................................................49

Non-resident for tax purposes for the full year....................................................................49Change of residency status during the year........................................................................49

Example 7.1 – Change of non-resident investor for tax purposes to resident taxpayer. .509 Reporting for deceased investors............................................................................................52

Example 9.1 – Single account when a formal trust has been established – interest paid after date of death............................................................................................................53Example 9.2 – Joint account when one investor dies - no interest paid before date of death................................................................................................................................54Example 9.3 – Joint account when one investor dies - interest paid before and after date of death............................................................................................................................54

10 Unit trust distributions............................................................................................................57What can be included in a UNIT TRUST DISTRIBUTION.....................................................57

Distributions from corporate unit trusts and public trading trusts........................................58Reporting................................................................................................................................58

Mandatory requirement.......................................................................................................58Additional information..........................................................................................................58

Example 10.1 – Non-primary production income and a fully franked distribution............59Capital Gains Tax (CGT).....................................................................................................60

Example 10.3 – Total capital gains is more than net capital gains..................................61Example 10.4 – Total capital gains equals net capital gains...........................................62

Investor Directed Portfolio Services....................................................................................62Example 10.5 – IDPS reporting in the AIIR......................................................................63Example 10.6 – IDPS consolidated reporting in the AIIR................................................65

Stapled Securities................................................................................................................65Example 10.7 – Stapled securities (dividend payments and trust distribution)................66

11 Alignment between the AIIR, SDS and the ITR.....................................................................6812 Farm management deposits..................................................................................................7713 Amendments processing.......................................................................................................94

Replacement AIIR..................................................................................................................94Example 13.1 – Replacing an AIIR..................................................................................95

AIIR containing corrected records..........................................................................................95



Example 13.2 – Correcting a previously lodged AIIR......................................................95Example 13.3 - Incorrect amount of interest for individual investor.................................96Example 13.4 - Incorrect amount of interest for joint account.........................................96Example 13.5 - Incorrect amount of interest for non-individual investor..........................96

Lodging by paper...................................................................................................................9614 Corrected TFN and ABN return files......................................................................................9715 Frequently asked questions...................................................................................................98

General..................................................................................................................................98Withholding Tax.....................................................................................................................99Income.................................................................................................................................100Unit Trust Distributions.........................................................................................................102Foreign source income.........................................................................................................102Changes to investor details..................................................................................................103Correcting or amending an AIIR...........................................................................................103

Appendices...............................................................................................................................104Appendix A - ERS/PC spreadsheet field name reference comparison................................104Appendix B - AIIR/ITR/SDS comparison..............................................................................109



TERMS & ACRONYMSTerm/Acronym DefinitionABN Australian Business Number

ADI Authorised deposit-taking institution

AIIR Annual investment income report

AMMA Attribution managed investment trust member’s annual statement

ATF As trustee for

ATO Australian Taxation Office

CFC Controlled foreign company

CFI Conduit foreign income

CGT Capital gains tax

DA Department of Agriculture (previously known as DAFF, Department of Agriculture, Fisheries and Forestry)

DIS Deferred interest security

DIV Dividend

EDI Exploration development incentive

ERS Electronic reporting specification

Final tax Under tax treaties the withholding tax charged by the country of source may be limited to a rate lower than the rate that would be charged in other circumstances - this reduced rate is then the final tax in the country of source.

FMD Farm management deposit

FCS Financial Claims Scheme

FSI Foreign source income

Greenfields mineral explorer A greenfields mineral explorer is a small exploration company that undertakes greenfields mineral exploration in Australia.

IDPS Investor directed portfolio services

Information exchange country This is a country that has entered into a Tax Information Exchange Agreement with Australia for the allocation of taxing rights with respect to certain income of individuals.

INT Interest



Term/Acronym DefinitionIRB Investment related betting chance

ITAA 1936 Income Tax Assessment Act 1936

ITAA 1997 Income Tax Assessment Act 1997

ITR Individual tax return

ITR 1936 Income Tax Regulations 1936

MIT Managed investment trust

OBO On behalf of

SAP Substituted accounting period

SDS Standard distribution statement

TAA 1953 Tax Administration Act 1953

Taxable Australian property Includes: a direct interest in real property situated in

Australia or a mining, quarrying or prospecting right to minerals, petroleum or quarry materials situated in Australia

a CGT asset that you have used at any time in carrying on a business through a permanent establishment in Australia, and

an indirect Australian real property interest; which is an interest in an entity, including a foreign entity, where you and your associates hold 10% or more of the entity and the value of your interest is principally attributable to Australian real property.

and options or rights over any of the above.

TDP Term deposit

TFN Tax file number

UTD Unit trust distribution

WPN Withholding payer number



1 INTRODUCTIONThis guide provides information to assist investment bodies complete and supply the Annual investment income report (AIIR).

It contains instructions and examples of legislative requirements and commonly reported scenarios.

Although specifically designed to support users of the latest versions of the AIIR reporting specifications, it provides useful information for all AIIR users.

WHO SHOULD USE THIS GUIDE

This guide has been prepared for AIIR suppliers, reporters, software developers and other interested parties.

HOW TO USE THIS GUIDE

Read this guide in conjunction with the current versions of the AIIR reporting specifications:

AIIR electronic reporting specification (ERS) v10.0.2 AIIR PC spreadsheet format v4.0.2

AIIR field references within this document relate to the ERS v10.0.2. To assist AIIR PC Spreadsheet specification users, Appendix A - contains a comparison of the ERS and spreadsheet format references and field numbers.

Section 12, Farm management deposits, applies only to ERS v10.0.2 users. Farm management deposit (FMD) information cannot be reported by ERS versions earlier than v10 or the AIIR PC spreadsheet specification.

The AIIR specifications are available from the Software Industry Partnership Office (SIPO) website: http://softwaredevelopers.ato.gov.au/aiirspecifications

REGULAR UPDATES

Tax legislation continues to be a significant part of the government's legislation program. If law changes occur affecting the information collected in the AIIR, then this guide and the reporting specifications will be updated accordingly.

To keep up to date with any changes to this guide or the AIIR specifications, subscribe to the AIIR news and updates bulletin by email to [email protected]


http://softwaredevelopers.ato.gov.au/aiirspecifications


You can also subscribe for news and updates from the Software Developers Homepage on their website.

FEEDBACK

We welcome your feedback – complaints, compliments and suggestions – about the information and examples contained in this guide. Providing feedback on your experience in using this guide helps us improve the way we do things. Provide your feedback and suggestions to [email protected]


mailto:[email protected]


2 LEGAL REQUIREMENTSOn 1 July 2015, Division 393 of Schedule 1 of the Taxation Administration Act 1953 (TAA 1953) replaced regulation 56 of the Income Tax Regulations 1936.

Under Division 393 of Schedule 1 to the TAA 1953, an entity defined as an investment body under section 202D of Part VA of the Income Tax Assessment Act 1936 (ITAA 1936), is required to report to the Commissioner of Taxation details of investments falling within the provisions of the tax file number (TFN) legislation and the FMD legislation in the approved form.

The AIIR is an approved form under section 388-50 of Schedule 1 to the TAA 1953.

Under the legislation, investment bodies are required to give to the Commissioner, an AIIR containing information including:

investor identity details (including names, addresses and TFNs or Australian Business Numbers (ABNs) quoted by investors)

details of investment income paid to investors during the financial year movements of principal of FMDs amounts withheld (including nil amounts) from any income that the investor is entitled to

receive during the financial year and from repayments of FMDs.

Section 202G of Schedule 1 to the ITAA 1936 requires an investment body that keeps the whole or part of the information it is obliged to give to the Commissioner on a computer system, to supply this information in a manner and form that is in accordance with the specifications set out by the Commissioner.

Investment bodies must lodge an AIIR with us within four months of the end of the financial year that it relates to – that is by 31 October – or within such further time as the Commissioner, by written notice given to the investment body, allows. Consequently, investment bodies that fail to lodge their AIIR by the due date may be subjected to either administrative penalties or prosecution. An administrative penalty for the late lodgment of an approved form is imposed by subsection 286-75(1) of Schedule 1 TAA 1953. The amount of the penalty is set out in section 286-80 of Schedule 1 to the TAA 1953.

SEE SECTION 3, LODGMENT, FOR MORE INFORMATION. RETENTION OF INFORMATION

Under subsection 262A(4) of the ITAA 1936, investment bodies must retain investment income information for a statutory period of five years. The information can be retained electronically or on electronic storage media to meet this statutory requirement. A copy of the data file supplied to us must be able to be regenerated on request from us (for example, if a problem has been encountered in processing of the data).



OTHER OBLIGATIONS

Requirement to deduct TFN withholding tax

Investment bodies are required to withhold amounts from investment income payments made to investors who have chosen not to quote their TFN or ABN, have not claimed an exemption from quoting, or have been deemed not to have quoted by us. The amount of tax to be withheld and remitted to us is calculated at the highest marginal rate plus the Medicare levy. Where TFN withholding amounts are withheld, they are reported at the TFN withholding tax deducted (7.66) field.

Requirement to deduct non-resident withholding amounts

If an investment body makes a royalty, interest or dividend payment to a non-resident, it may be required to withhold an amount from the:

dividend payment under sections 12-210 or 12-215 of Schedule 1 to the TAA 1953 interest payment under sections 12-245 or 12-250 of Schedule 1 to the TAA 1953 royalty payment under sections 12-280 or 12-285 of Schedule 1 to the TAA 1953.

Non-resident withholding amounts from royalties paid by investment bodies are reported on the PAYG withholding from interest, dividend and royalty payments paid to non-residents - annual report (NAT 7187).

Do not report non-resident withholding amounts from interest and dividends in both the AIIR and the PAYG withholding from interest, dividend and royalty payments paid to non-residents - annual report.

See Section 8, Non-resident investor reporting, for more information.

Australian business numbers

Under section 23 of Division 9 of A New Tax System (Australian Business Number) Act 1999, it is an offence to:

identify yourself or an associated entity using a number that is not an ABN as if it were an ABN

use an ABN that is not your own or an associated entity's own ABN.

ABNs are reported at the Supplier Australian business number (7.3), Investment body Australian business number (ABN) or withholding payer number (WPN) (7.34) and Investor Australian business number (7.139) fields.



Withholding payer numbers

If an investment body does not have an ABN they must provide a WPN instead as their identifier at the Investment body Australian business number or withholding payer number (7.34) field. Suppliers require an ABN to lodge the AIIR.

Managed investment trust fund payments and withheld amounts

Withholding arrangements apply to managed investment trust (MIT) fund payments made to foreign residents directly from MITs or indirectly through intermediaries (custodians and other entities). Withholding is predicated on a foreign resident having a MIT withholding tax liability.

A fund payment is a component of a payment made by the trustee of a MIT that, in effect, represents a distribution of its net income of the trust.

A fund payment does not include dividends, interest, royalties, foreign source income and capital gains on assets that are not taxable Australian property and deductions relating to any of the above amounts. Dividends, interest and royalty payments are excluded because they are subject to their own withholding tax arrangements. Foreign source income and capital gains on assets that are not taxable Australian property are excluded because these are not taxable in the hands of foreign residents. Fund payments are reported at the Managed investment trust fund payments (7.100) field. See section 15, Frequently asked questions, for more information.

Under subsection 16-153(4) of Schedule 1 to the TAA 1953 an entity is required to withhold and must provide, on an annual basis, a report to the Commissioner on the amounts withheld pursuant to Subdivision 12-H of Schedule 1 to the TAA 1953. Amounts withheld from MIT fund payments are a final tax and are reported at the Amounts withheld from managed investment trust fund payments (7.101) field.

The imposition of tax and the establishment of the applicable rate of tax are provided for by the Income Tax (Managed Investment Trust Withholding Tax) Act 2008 and the Income Tax (Managed Investment Trust Transitional) Act 2008.If the entity receiving the payment is a resident of an information exchange country, the tax currently imposed is:

Fund Payment Type Tax RateNon clean building managed investment trust 15%Clean building managed investment trust 10%

If the entity receiving the payment is not a resident of an information exchange country, the tax rate is 30%.

The annual report to the Commissioner for MIT fund payments and withheld amounts must be in the approved form. The AIIR is the approved form for the annual report.

See section 3, Lodgment, for more information.



Consolidated reporting

Investment bodies that offer units in a range of trusts are required to report income from these trusts in their AIIR in exactly the same format as they report this information to their investors. The information reported in the AIIR must be in the same format as the tax statements to facilitate the pre-filling of income tax returns.

If the trusts have separate identifiers, they are regarded as separate reporting entities and should lodge a separate AIIR and matching tax statements to their investors. However, one consolidated AIIR may be lodged if all of the following conditions are met and approval is granted by us – the:

responsible entity is the manager of the trust or trusts trusts do not have their own identifiers (ABN) trusts do not have to lodge income tax returns income from the trusts will be reported in the consolidated AIIR in the same format as it

is reported to the investors in their tax statement.

Some intermediaries satisfy these requirements.

Requests to lodge a consolidated AIIR should be emailed to [email protected]

Financial Claims Scheme

The purpose of the Financial Claims Scheme (FCS) is to protect depositors of authorised deposit-taking institutions (banks, building societies and credit unions) and policyholders of general insurance companies from potential loss due to the failure of these institutions. The Australian Prudential Regulation Authority is responsible for the administration of the FCS.

The information required for the FCS ATO report is to be included in the AIIR. To minimise reporting costs a single AIIR can be lodged that straddles the FCS event. However, if you prefer, you can lodge an AIIR for the full year that covers the time up to the FCS event and another report for the time subsequent to the FCS event.

More information on the FCS can be found at apra.gov.au

First home saver account (FHSA)

From 1 July 2015 the Australian Government has abolished the first home saver accounts (FHSA) scheme and these accounts are now treated like any ordinary account.

Interest earned on an FHSA is reported the same as other interest earning accounts with the Type of payment (7.64) field reported as INT.


http://www.apra.gov.au/CrossIndustry/FCS/Pages/default.aspx

mailto:[email protected]


Mergers

When two investment bodies merge during the course of a financial year, but not on 1 July of that year, the two entities must each report an AIIR for the year in which the merger occurred.

If the merge occurs on 1 July, both entities report for the year before the merge. One entity will advise they have no future obligations and the other will continue to report annually.

Example 2.1 – Merged before or after 1 July

The Murbah Credit Union is taken over by the Montego Shire Credit Union on 10 October 2015. For the period from 1 July 2015to 9 October 2015 both investment bodies have an obligation to supply an AIIR as both were investment bodies at this particular time during the financial year.

The obligation operates as follows:

Murbah Credit Union lodges an AIIR for the period of time it was an investment body – that is for the period 1 July 2015 until 9 October 2015. The due date for the 2016 AIIR for the reduced period still remains 31 October 2016 – that is four months after the end of the financial year the report relates. Murbah Credit Union will notify us they no longer have an obligation to lodge future AIIR by reporting N at the Future reporting obligation (7.49) field. Montego Shire Credit Union, from the date of the merger 10 October 2015, takes on new investors from the Murbah Credit Union and full legislative obligation to report these investors in the 2016 AIIR. Montego Credit Union reports investments relating to its original investors from 1 July 2015 to 30 June 2016 and the new investors from 10 October 2015 until 30 June 2015 in their 2016 AIIR.

Montego Shire Credit Union will have an AIIR obligation for subsequent years and in 2016 will report all investors for the full year.

Example 2.2 – Merged on 1 July

Tembi Bank Ltd was merged into Areba Bank Corporation on 1 July 2015.

The obligation operates as follows:

Tembi Bank Ltd will lodge a 2016 AIIR for the year ended 30 June 2016 as it was an investment body for the full year ending on 30 June 2016. Tembi Bank Ltd notifies us that it no longer has any future obligation to lodge an AIIR by reporting N at the Future reporting obligation (7.49) field in their 2016 AIIR.

Areba Bank Corporation received the new investors from Tembi Bank Ltd. Areba Bank Corporation will report on their existing investors for the year ending 30 June 2016, and then all their investors, including those from Tembi Bank Ltd, for future years.



3 LODGMENT

DO I NEED TO LODGE

An AIIR is required if any of the following apply:

The total amount of income paid or credited to the investment is $1.00 or more and the total number of investments accepted by the investment body during the year is 10 or more.

Any investment has had an amount withheld because a TFN, ABN or exemption was not quoted.

Non-resident withholding has occurred. The investment is a Farm management deposit account.

Investment bodies should lodge a nil AIIR for any financial year that the above criteria is not met to avoid non-lodgment compliance contact.

If the number of investments accepted by an investment body is less than 10 and there are no farm management deposit accounts to report, there is no obligation to lodge an AIIR, except in cases where income greater than $1 or withholding has occurred. However, there may still be a requirement to lodge a Dividend and interest schedule (NAT 8030-6.2015) that forms part of the company tax return.

Lodging Nil AIIR Reports

Nil returns can be lodged:

electronically by reporting N in the Report format indicator field (7.50) in the AIIR ERS. If you no longer have a reporting obligation complete the Future reporting obligation field (7.49). This will eliminate the need to report any future nil reports

by selecting Nil at Question 2 on the Instructions and paper form for Annual investment income report (NAT 74794) and completing sections A, B and F. If you no longer have a reporting obligation complete Question 10, Future reporting obligation. This will eliminate the need to report any future nil reports.

This form is available on ato.gov.au

by emailing [email protected] with the following information:- Financial year end date


https://www.ato.gov.au/business/yearly-reports-and-returns/in-detail/investment-income-reporting/instructions-and-paper-form-for-annual-investment-income-report/


- Type of report = Nil return- Investment body details including

- registered name - ABN- branch number- business and postal address- contact details, including name and phone number- email address for future notifications and- if you expect to lodge an AIIR in the future.

WHEN TO LODGE

The AIIR must be lodged within four months of the end of the financial year that it relates to - that is by 31 October. This due date also applies to reporters operating on a Substituted Accounting Period (SAP), regardless of the SAP financial year end date.

AIIR lodgments that contain MIT fund payments and withheld amounts

Lodgment is due within 14 days after the end of six months following the end of the MIT’s income year. If, for example, the end of the income year is 30 June 2016, the annual report is due by 14 January 2017.

If an entity is required to lodge an AIIR and it is also required to provide information about amounts withheld from fund payments, it can include the information about the fund payments in the AIIR. Information provided in the AIIR will be taken to have been provided to us in the approved form for the purposes of subsection 16-153(4). However, the acceptance of the AIIR as the form of reporting of Subdivision 12-H payments does not alter the existing requirements to lodge the AIIR by 31 October each year.

If Subdivision 12-H payments are not able to be reported in the AIIR by 31 October reporting of fund payments and amounts withheld will need to be provided by either submitting a:

second AIIR disclosing only Subdivision 12-H information and lodged by 14 January replacement AIIR disclosing previously lodged AIIR data as well as Subdivision 12-H

information, and lodged by 14 January.

Extension of time to lodge

AIIR reporters can apply for an extension of time to lodge. The request must be received before the 31 October. Email the request to [email protected] and include the following:



ABN investment body name reasons for the request and the date by which the reporter will be able to supply the AIIR

Confirmation of extensions granted and the expected lodgment date which is set at the time will be provided by email. Generally, further extensions after the set date will not be granted.

Lodging your AIIR early to assist pre-filling

We encourage early lodgment of the AIIR to assist your investors with the completion of their income tax return through providing timely information that is pre-filled into individual tax returns and the Tax Agent Portal.

You can make it easier for your investors to lodge their tax return by:

lodging in a timely manner providing data in the manner set out in the specifications available from the SIPO

website

Incremental lodgment

For some investment bodies it may be easier to lodge the AIIR incrementally, as the data becomes available. We are prepared to accept incremental AIIR lodgments, provided the data in subsequent AIIR files does not repeat previous client details. This benefits your investors by providing timely information that is pre-filled into myTax and the Tax Agent Portal.

LODGMENT METHODS

Specification Lodgment channel

v10 – Electronic reporting specification Business Portal (file transfer)

v8 & v9 – Electronic reporting specification You must migrate to v10 for 2016 reporting

v4 – PC Spreadsheet format reporting specification

Business Portal (secure mail)

Paper form (NAT 74794) Business Portal (secure mail) orFax to 07 3213 8969



Using the Business Portal

To lodge through the Business portal you will need an AUSkey.

This page has a link to Getting an AUSkey which explains the two types of AUSkeys available and how to apply - Business-Portal Getting-started

Every person, associated with the business, who wants to lodge online on behalf of that ABN, will need an AUSkey. The type of access and reports that can be lodged using that specific AUSkey is managed by your organisation’s access administrator, that is, the holder of the administrator AUSkey.

File Transfer

All AIIRs compiled using the electronic reporting specification are lodged through the file transfer facility on the portal.

Select Lodge file from the left menu Select test or lodge – Files can be tested prior to lodgment to enable any errors to be

corrected prior to lodging. The Run type field (7.4), in the AIIR, must be set to T for test data or P for production data.

Follow the steps available at business portal help

Once the transfer is complete an ATO reference number is provided.

Secure Mail

All AIIRs compiled using the PC spreadsheet reporting specification or the AIIR paper form are lodged through the secure mail facility on the portal.

Files must be prepared in a supported format and version compatible with ATO systems. Text files or scanned images of spreadsheets and word processing files cannot be lodged using the file transfer function on our portals.

In the business portal select Mail from the left menu Select New message from Inbox Select the Debt and lodgment subject topic Select Lodge data report A message can be entered e.g. 2016 AIIR – ABN xx xxx xxx xxx Investment body name

then select Add button to attach your spreadsheet and then select Next.


http://portalhelp.ato.gov.au/BP/ADMIN/Index/File_transfer/How_do_I_use_file_transfer/


Select Send Once the transfer is complete an ATO reference number is provided

Portal email notifications

Email notification is a useful way of being alerted to new portal messages from the ATO. Reporters who lodge through the file transfer facility will receive notification that the following data is available to download:

validation reports return files such as Corrected ABN and TFN reports ATO initiated data uncollected files

It is recommended that you set up email notification to receive automatic emails when there is a download available in your Portal inbox.

We also recommend you add a group email for your organisation rather than individual users email addresses.

To set up email notification: Select the email notification Setup or Change buttons from the inbox screen Two options will display No and Yes – email address Enter the email address in the field box and select submit

LODGMENT VALIDATION

After an AIIR file is submitted and transferred, through the portal’s file transfer to the ATO, the File status – in progress screen is displayed, providing a link to the validation result. Once downloaded the validation report confirms if the file has been lodged or if there are errors to correct.

If Test has been selected, files will not be lodged to us, but a validation report is still produced.

Errors must be corrected before the report can be lodged. A report may be lodged with warning errors but it is recommended that they are corrected, where possible, before lodgment to improve the data quality. In some cases, warnings may prevent the information from pre-filling.

Follow the steps below to determine the corrective action you need to take before re-lodging.



Steps

1. Identify the error or warning from the validation report

The Summary of Warnings and Summary of Errors sections of the validation report provide an explanation of the error and the total number of occurrences.

The Detail of Errors and Details of Warnings sections of the validation report provide details of the data record and field name.

See the example validation report below.

2. Take the appropriate action, as per Appendix C, to correct the data and relodge.

Example validation report

Summary of Errors:------------------Reason Code: VR161 Total errors: 2Value in this field must equal to previous' Sequence number of DINVESTOR' record plus 1

Detail of Errors:-----------------

Summary of Warnings:--------------------Reason Code: WM01 Total warnings: 2The field must contain at least one alpha character (A-Z, a-z).

Reason Code: WM02 Total warnings: 1The field must be entered but you did not report anything in this field.

Reason Code: WM69 Total warnings: 1The field must be within the financial year reported in the financial year field in the Investment Body Identity Record.

Reason Code: WM142 Total warnings: 1TFN withholding tax refunded is greater than zero then value entered in TFN withholding tax deducted must be equal to or greater than TFN withholding tax refunded.


ReasonCode:

RecordNo.

RecordType

ReportingReference

Field name Field Data

VR161 1723 Investor Seq no of DINVESTOR record 2VR161 Investor Seq no of DINVESTOR record 2


Detail of Warnings:-----------------ReasonCode:

RecordNo.

RecordType

ReportingReference

Field name Field Data

WM01 52 Investor Individual investor surname 221WM01 52 Investment Account name 001WM02 266 Investment Individual investor surname 221WM69 31254 FMD xyz Date of transfer out 2011WM142 31254 FMD xyz Type of Investment 1



4 INVESTOR AND ACCOUNT REPORTINGThe investor information reported assists us to correctly identify the individual or entity for which the investment income is being reported. A key purpose of the AIIR is to correctly match the investment income reported with the income declared by taxpayers in their tax return.

After processing the AIIR, the investment income is made available to investors by pre-filling to the correct labels in the individual tax return or the Tax Agent’s Portal that assists individuals to complete and lodge their tax returns electronically. If an investor lodges through a tax agent, this information is available to tax agents through the Tax Agent Portal. Additionally, as part of our compliance program, the information is used for post-compliance activity such as data matching. Some of the information is also passed on to other government bodies and foreign tax authorities.

Investment income is reported in the Investment account data record and the Supplementary income account data record. Reporting of movements of principal of FMDs and interest income earned from FMDs is reported in the Farm management deposit account data record.

This section provides guidance on general reporting requirements for investor and account information reported within the AIIR.

Exploration credits

The Exploration development incentive measure commenced on 1 July 2014. The measure enables Greenfield mineral explorers (i.e. eligible exploration companies) to distribute exploration credits to shareholders. At this point in time the measure will be offered for the 2015, 2016 and 2017 financial years with AIIR reporting requirements in the 2016, 2017 and 2018 financial years.

For the 2016 financial year only, to minimise compliance costs for reporters, exploration credits directly distributed by a Greenfields mineral explorer are to be reported in the Foreign income tax offset (7.88) field with the Type of payment (7.64) field set to DIV. There is no provision in the 2016 financial year for reporting of exploration credits distributed through trusts.

New reporting fields will be included in the next versions of the AIIR reporting specifications for 2016-17 year onwards.

For more information on this incentive go to our website

INVESTOR TFN

There have been cases where non-individual income is incorrectly mapped to an individual within our systems. This will occur when:


https://www.ato.gov.au/business/exploration-development-incentive/


the Investor entity type (7.137) field code is incorrectly listed as an individual – that is ‘I’ or

an individual's TFN is incorrectly recorded on the account.

Investment bodies should ensure they clarify with their investor, at the time the account is established, that the correct investor entity type and TFN are recorded. This will minimise any post-compliance activity the investor may experience.

In some circumstances an investor is not required to quote, or may choose not to quote, a TFN or ABN. Details of these investors and their investment income must be included in the AIIR. When an investor quotes a TFN exemption code, the appropriate code from the following table is reported at the Investor tax file number (7.138) field and an investment body is not required to deduct TFN withholding tax.

TFN exemption

codeWhen to use?

Investor entity type code

333333333

Investor is a child under sixteen on 1 January before the date on which the payment is made and the payment is less than the tax free threshold for minors for the financial year. (The tax free threshold limit must be pro-rated when it is not for the whole financial year.) This exemption code does not apply to public company share investments.

The Individual investor date of birth (7.144) field must be reported when using this exemption code.

I & D

444444441

Investor is a pensioner. The investor is the recipient of a Centrelink age or disability support pension or a pension under the Veterans' Entitlements Act of 1986 and notifies the investment body of their full name and pension entitlement.

I & D

444444442

The investor is the recipient of another eligible Centrelink pension such as a wife's, carer's, special needs, widow's B pension, parenting payment or special benefit, and the investor notifies the investment body of their full name and pension entitlement.

Newstart Allowance and Sickness Allowance are not eligible benefits for exemption purposes.

I & D

555555555

The investor is an entity that does not have a TFN and advises that it is exempted from lodging an income tax return.

An entity, for the purpose of a Part VA investment and defined in section 202A of the ITAA 1936 means a body corporate or an unincorporated association, but does not include a natural person or a partnership.

Examples of such entities include charitable, social and other non-profit organisations, societies and clubs and non-profit companies with taxable incomes below the relevant threshold. These entities are required to notify the investment body of their full name, address and reason for their exempt status.

C, P, T,S & O

666666666 The investor is in the business of providing business or consumer C & O



TFN exemption

codeWhen to use?

Investor entity type code

finance and is receiving the income from business or consumer finance provided to a borrower.

An example of this type of investor is a bank receiving interest on a loan that it made in the course of providing business or consumer finance to a borrower.

777777777 **The investor is a resident of Norfolk Island. The investment income of Norfolk Island residents is exempt from Australian tax.

I, D, C, P, T, S, G & O

888888888 The investor is not a resident of Australia for tax purposes. I, D, C, P, T, S, G & O

**From 1 July 2016 Norfolk Island residents will no longer be exempt from Australian tax. See Tax and Superannuation Laws Amendment (Norfolk Island Reforms) Act 2015 for further information.

INVESTOR ENTITY TYPE

The Investor entity type (7.137) field identifies the type of investor holding the account and is used in identity matching. It is expected that the investment body will know the entity type of their investor. Currently only the codes listed below are to be reported.

Entity type Code When to use?

Individual I

The investor is an individual person. An account may be held by one or more individual persons. When this occurs, include an Investor data record with Investor entity type = I for each individual investor in the account.

Deceased individual D The investor is an individual person who has died during the reporting

period.

Corporation C

The investor is a public or private company or an incorporated organisation. Joint investment accounts held by two or more companies are usually formal partnership arrangements (joint ventures) and should quote the partnership TFN or ABN of the joint venture rather than the separate company TFNs or ABNs.

Partnership P The investor is a formal partnership – a formal partnership exists.Trust T The investor is a formal trust.Super fund S The investor is a super fund.Government organisation G The investor is a government organisation.Othernon-individual O The investor is an unincorporated organisation or a non-individual entity

not mentioned above such as sports clubs and informal trusts.

REPORTING FOR DIFFERENT ENTITY TYPES

To ensure correct pre-filling and to avoid post-compliance activity for investors, it is critical that individual investor names and TFNs are not reported at non-individual fields when the Investor entity type (7.137) field code equals I or D. For example, individual investor names should not be reported at the Non-individual investor name (7.146) field.


https://www.comlaw.gov.au/Details/C2015A00053

https://www.comlaw.gov.au/Details/C2015A00053


The following rules should be followed:

Individuals

Reference number Field name Explanation

7.59 Account name Account name

7.137 Investor entity type I = Individual orD = Individual is deceased

7.138 Investor tax file number Individual investor’s TFN as quoted

7.139 Investor Australian business number Individual investor’s ABN as quoted

Corporation or incorporated organisation

If an account is held by a company or incorporated corporation, the company or the incorporated corporation’s TFN or ABN and registered name should be reported. The name and TFN of the Public Officer or other signatory to the account should not be reported.


7.59 Account name Account name of company or incorporated organisation

7.137 Investor entity type C = Corporation7.138 Investor tax file number Company’s TFN as quoted7.139 Investor Australian business number Company’s ABN as quoted7.146 Non-individual investor name Registered name of company

Partnerships

A formal partnership arrangement can be identified by the existence of a partnership agreement and a partnership TFN or ABN.


7.59 Account name Account name of partnership7.137 Investor entity type P = Partnership7.138 Investor tax file number Partnership’s TFN as quoted7.139 Investor Australian business number Partnership’s ABN as quoted7.146 Non-individual investor name Name of partnership

Individual investor surname (7.141) and given name (7.142 and 7.143) fields should not be completed.



Joint accounts

If a partnership entity does not exist for tax purposes, the joint holders of the account should be treated as separate investors. An Investor data record is required for each investor.Individual investor


7.59 Account name Account name7.137 Investor entity type I = Individual7.138 Investor tax file number Investor’s TFN as quoted7.139 Investor Australian business number Investor’s ABN as quoted7.146 Non-individual investor name Blank fill

Non-individual investor


7.59 Account name Account name7.137 Investor entity type C, P, T, S, G or O7.138 Investor tax file number Investor’s TFN as quoted7.139 Investor Australian business number Investor’s ABN as quoted

Individual investor surname (7.141) and given name (7.142 and 7.143) fields should not be completed.

Unequal shares in a joint account

Holders of accounts in joint names are presumed to have joint beneficial ownership of the monies in equal shares, unless they prove otherwise. Therefore income is to be returned equally.

Within the AIIR, the full amount of income attributable to the account is reported for each investor within a joint account. The amount should not be split between the account holders because our system divides the amount of income by the number of investors reported in the joint account record.

If the investor advises the investment body that the beneficial ownership of the monies is not in equal shares – that is unequal shares, the investment body reports this information in the AIIR by providing a separate Investment account data record for each investor with their share of investment income paid.

Trusts

This section relates to trusts established under a formal arrangement such as a trust deed or will. Although it is not a separate legal entity, it is an entity for tax purposes – that is the entity



has a trust TFN and the trustee is required to lodge a trust tax return. The trustee can be an individual or a non-individual.

Any use of ITF (in trust for), OBO (on behalf of) or ATF (as trustee for), in the account or investor name fields, MUST be preceded and followed by a space or the account will not be recognised as a trust.


7.59 Account name Trust name orTrustee’s name ATF trust name

7.137 Investor Entity type T = Trust7.138 Investor tax file number Trust or Trustee’s TFN7.139 Investor Australian business number Trust’s or Trustee’s ABN

7.146 Non-individual investor name Trust name orTrustee’s name ATF trust name

Example 4.1 – Formal trust with trust TFN

An account opened by trustee Damien Renard for the D R Family Trust and the trust TFN is quoted.

INVESTMENT ACCOUNT DATA RECORD (EXTRACT)

ReferenceNumber

Field name Content Explanation

7.59 Account name D R Family Trust Name of Trust

INVESTOR DATA RECORD (EXTRACT)

ReferenceNumber


7.137 Investor entity type T T = Trust7.138 Investor tax file number 012345678 Trust’s TFN

7.146 Non-individual investor name D R Family Trust Name of the Trust (NOT the name of the trustee)

Example 4.2 – Formal trust with trustee TFN

An account opened by trustee Anson Raines for the AR McPeters Family Trust and the trustee’s TFN is quoted.


ReferenceNumber




7.59 Account name Anson Raines ATF AR McPeters Family Trust Trustee ATF Trust


ReferenceNumber


7.137 Investor entity type T T = trust7.138 Investor tax file number 912345678 Trustee’s TFN

7.146 Non-individual investor name Anson Raines ATF AR McPeters Family Trust Name of Trustee ATF Trust

Superannuation funds


7.59 Account name Name of super fund7.137 Investor entity type S = Super fund7.138 Investor tax file number Super fund’s TFN7.139 Investor Australian business number Super fund’s ABN7.146 Non-individual investor name Name of Super fund

Only one investor data record is reported for each Super fund. Do not report the TFNs or names of individual trustees in separate Investor data records. If the trustee’s names are reported they should be reported at the Account name (7.59) and at the Non-individual investor name (7.146) fields, for example, John and Mary Smith ATF the Smith Superannuation fund.

Government organisation


7.59 Account name Name of government organisation7.137 Investor entity type G = Government7.138 Investor tax file number Government body’s TFN7.139 Investor Australian business number Government body’s ABN7.146 Non-individual investor name Name of government body

Details of account signatories should not be reported in the Investor data record.



Other non-individual


7.59 Account nameName of unincorporated organisation or non-individual entity

7.137 Investor entity type O = Other non-individual7.138 Investor tax file number Non-individual’s TFN7.139 Investor Australian business number Non-individual’s ABN

7.146 Non-individual investor nameName of unincorporated organisation or non-individual entity

Third party accounts

A third party account is an account that has been opened by an entity, other than a solicitor or interposed entity, acting on behalf of an investor and is not a formal trust. Third party accounts include those opened by principals on behalf of agents, bare trusts, and entrepot nominee companies. See Section 7, Interposed entities, for more information on accounts opened by interposed entities or solicitors.

Investment income earned by a third party account can be taxed in the hands of the third party or the investor (beneficiary), depending on the type of account.

For example, if an account is opened by a:

parent on behalf of an underage child the investment income is to be reported as being earned by the parent while the parent controls the account. In this instance, it is the parent’s (third party) details that are reported.

third party (e.g. bare trust) on behalf of an investor (beneficiary) who is entitled to receive all or some of that income, then it is the investor who is deemed to have received the income. In this instance, it is the beneficiary’s and not the third party’s details reported.

Example 4.3 –Third party account where the income is deemed to be the third party’s

An account held by Samsara Eden West ATF her daughter, Sutton West. The source of the funds is Samsara and the funds are controlled by Samsara. As trustee, Samsara has quoted her own TFN. This accords with Taxation ruling IT 2486 that indicates that the income belongs to Samsara.


Referencenumber




7.59 Account name SAMSARA EDEN WEST ATF SUTTON WEST Third party ATF beneficiary


Referencenumber


7.137 Investor entity type I I = Individual7.138 Investor tax file number 912345678 TFN of third party7.141 Individual investor surname WEST Third party’s surname

7.142 Individual investor first given name SAMSARA Third party’s first given name

7.143 Individual investor second given name EDEN Third party’s second given name

7.144 Individual investor date of birth 24041982 DOB of third party

Example 4.4 – Account opened by third party OBO an individual investor

An account was opened by Charlie Jaxon OBO Claudia Belle Gant. Claudia Belle Gant is entitled to receive all of the income from the investment account.


Reference number Field name Content Explanation

7.59 Account name CHARLIE JAXON OBO CLAUDIA BELLE GANT Third party OBO Client



7.137 Investor entity type I I = Individual7.138 Investor tax file number 789456879 TFN of investor7.143 Individual investor surname GANT Investor’s surname

7.142 Individual investor first given name CLAUDIA Investor’s first given name

7.143 Individual investor second given name BELLE Investor’s second given name

7.144 Individual investor date of birth 17091964 DOB of investor

Example 4.5 – Account opened by third party OBO a non-individual investor

An account opened by T M Able and X J Prince OBO the Channing Darts Club. The darts club is entitled to receive all of the income from the investment account.




Referencenumber Field name Content Explanation

7.59 Account nameT M ABLE & X J PRINCE OBO THE CHANNING DARTS CLUB

Third party OBO client



7.137 Investor entity type O O = Other non-individual

7.138 Investor tax file number 789412789 TFN of unincorporated organisation

7.146 Non-individual investor name

CHANNING DARTS CLUBor T M ABLE & X J PRINCE OBO THE CHANNING DARTS CLUB

Name of the non-individual investor orName of third party OBO non-individual investor

PAYMENT TYPE

There are a number of different payment types reported in the AIIR and reporting the correct code at the Type of payment (7.64) field is critical to ensure the investment income is matched to the right label in the tax return for pre-filling and to avoid post-compliance activity.

For example, amounts reported at the Interest (7.71) field with a payment type of UTD are mapped to label 13U in the Individual tax return (ITR) whereas amounts reported at the Interest field with a payment type of INT are mapped to 10L.

The following table identifies the payment types reported in the AIIR.

Payment type Acronym Details of payment type

Deferred interest securities DIS Interest on deferred interest securities only (see Section 5, Deferred interest securities, for reporting requirements)

Farm management deposit FMDInterest on farm management deposits only (see Section 12, Farm management deposits, for reporting requirements)

Term deposit TDP Interest on term deposits only

Interest INT Interest on all other interest bearing investments

Investment related betting chance IRB Cash or non-cash payments from investment related betting chance

Dividend andExploration credits

DIV

Franked, unfranked dividends and franking creditsandExploration credits directly distributed by a greenfields mineral explorer



Payment type Acronym Details of payment type

Unit trust distribution UTD

Unit trust distributions including managed investment trust payments made to non-residents and amounts withheld under Subdivision 12-H (see Section 10, Unit trust distributions, for reporting requirements)

Foreign source income FSI Foreign source investment income that is not part of a unit trust distribution

Note: Uninscribed securities are not subject to TFN or AIIR reporting (Tax Determination TD 92/185)This table indicates which fields relate to each payment type.

Field name Reference number DIS INT TDP

DIVIRB FMD UTD FSI

DIV Expl Cr

Non-resident withholding amount deducted 7.68

Non-resident withholding amount refunded 7.69

Cash or non-cash value of an investment related betting chance prize

7.70

Interest 7.71 Unfranked dividends not declared to be conduit foreign income 7.72

Unfranked dividends declared to be conduit foreign income 7.73

Franked dividends 7.74

Franking credit 7.75

Other taxable Australian income 7.76

Non-primary production income 7.77 Other deductions relating to distributions 7.78

Capital gains discounted method 7.79

Capital gains indexation method 7.80

Capital gains other method 7.81

CGT concession amount 7.82

Net capital gain 7.83

Total current year capital gains 7.84

Taxable foreign capital gains 7.85 Assessable foreign source income 7.86

Other net foreign source income 7.87

Foreign income tax offset 7.88 Australian franking credits from a New Zealand franking company 7.89

Tax-exempted amounts 7.90

Tax-free amounts 7.91



Field name Reference number DIS INT TDP

DIVIRB FMD UTD FSI

DIV Expl Cr

Tax-deferred amounts 7.92

Other allowable trust deductions 7.93 Share of credit for amounts withheld from foreign resident withholding

7.94

Share of credit for tax paid by trustee 7.95

Non-resident beneficiary ss98(3) assessable amount 7.96

Non-resident beneficiary ss98(4) assessable amount 7.97

Managed investment trust fund payments 7.100

Amounts withheld from managed investment trust fund payments 7.101

Share of National rental affordability scheme tax offset 7.105

Primary production income 7.106 Share of credit for tax withheld where ABN not quoted 7.107

Deductions relating to distribution of primary production income 7.108

Deductions relating to distribution of non-primary production income 7.109

Transferor trust income 7.110

CFC income 7.111

Net foreign rent 7.112 Unfranked distributions from trusts 7.113

Franked distributions from trusts 7.114

PAYMENT DATES

The Date of payment (7.62) field identifies the date the income was paid or credited to the investment account or in the case of a:

FMD account, the date the investment income was paid to the depositor or their nominated account

trust distribution, the last day of the trust’s tax year exploration credit, the date of distribution to the investment account

The following rules apply when reporting the date of payment:

Dividend payments (Type of payment (7.64) = DIV) – report each dividend payment date separately and do not aggregate payments.



Exploration credits (Type of payment (7.64) = DIV) – if multiple credits are distributed report the payment date as 30 June in year of the report and report an aggregated amount at Foreign income tax offset (7.88) field

Interest payments (Type of payment (7.64 = INT) – if multiple payments are received, report the payment date as 30 June in the year of report and aggregate payments at Interest (7.71) field.

Trust distributions (Type of payment (7.64 = UTD) – multiple distributions, report payment date as 30 June in year of report and aggregate the amounts, even though the June distribution may not actually be paid to the investor until the next financial year.

An AIIR will not be accepted if the Date of payment (7.62) field is in a year other than the financial year for which the AIIR is lodged.

Example 4.6 – Multiple interest payments

Estelle van Hagen holds an interest bearing account and receives interest payments in October 2015 and in February and June 2016. The payments are aggregated and the payment date is 30062016.

Example 4.7 – Multiple franked dividend payments

Rosita Stavros holds shares in Cold Cables Ltd and receives four franked dividend payments in September and December 2015 and in March and June 2016. Each payment and date of payment is reported in a separate Investment account data record followed by an Investor data record.

ACCOUNT SIGNATORIES

Do not report details of account signatories who are not investors in the account in Investor data records. Such reporting is incorrect and causes errors when the reported investment income amounts are matched to the amounts declared in tax returns.

Example 4.8 – Additional signatory on an individual account

An account is held in the name of Mrs Penelope Costanza, an elderly pensioner. Her daughter Venorika Stone is a signatory to the account but does not own the funds held in the account. The interest paid to the account belongs to Mrs Penelope Costanza. Only one Investor data record containing Penelope's information is provided. Venorika's details are not reported in the AIIR.

Example 4.9 – Office bearers as signatories

An account is held in the name of the Mayberry River Tennis Club. The club office bearers, Roderick Mainstrong, Lourdes Wentworth and Dom Messenger are the authorised signatories to the account. The club, and not the three office bearers, is the owner of the funds in the account and entitled to any investment income earned by the account. When the interest



payment is reported, only one Investor data record is provided, containing the name of the Mayberry River Tennis Club at the Non-individual investor name (7.146) field. The club signatories are not reported in the AIIR.

SUBSTITUTED ACCOUNTING PERIODS

A substituted accounting period (SAP) is an accounting period that has a balancing date different to the normal financial year end balancing date of 30 June. In the past, entities applying for a SAP could nominate any date as their balancing date but as this proved administratively difficult, all entities must now nominate the last day of a month.For the purposes of the AIIR, an investment body is considered to be operating on a SAP when the investment body meets all of the following conditions. It is:

approved by the Commissioner as operating on a SAP making payments to investors who are all operating on the same SAP reporting payments in accordance with that SAP.

The balancing date the entity has chosen determines if the entity is an early or late balancer. From July 2001, an entity whose end of year is before June (December to May) is considered an early balancer and an entity whose end of year is after June (July to November) is considered a late balancer.

For example:

Balancing periodEarly Normal Late

Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

An exception to this rule is for entities that have joined a corporate entity group that already has a late December balancing date.

SAP fields and rules

If an investment body meets the AIIR SAP conditions, rules apply for specific fields including the reporting of each payment and date of payment separately.

7.5 Financial year end date - the investment body reports the end date in accordance with the end date of the normal financial year to which the payment relates OR its own balancing date.

7.33 Financial year - the investment body reports the financial year to which the payment relates.

7.47 Reporting period indicator - must equal S.



7.48 SAP year end date - the SAP year end date or balancing date. The dates reported at this field and the Financial year end date (7.5) field will indicate whether the investment body is a late or early balancer.

For example:

SAP balancing date Early / late balancer

AIIR Fields7.5 7.33 7.47 7.48

31 December 2015 Early 30 June 2016 2016 S 31 December 201531 January 2016 Early 30 June 2016 2016 S 31 January 201628 February 2016 Early 30 June 2016 2016 S 28 February 201631 March 2016 Early 30 June 2016 2016 S 31 March 201630 April 2016 Early 30 June 2016 2016 S 30 April 201631 May 2016 Early 30 June 2016 2016 S 31 May 201631 July 2016 Late 30 June 2016 2016 S 31 July 201631 August 2016 Late 30 June 2016 2016 S 31 August 201630 September 2016 Late 30 June 2016 2016 S 30 September 201631 October 2016 Late 30 June 2016 2016 S 31 October 201630 November 2016 Late 30 June 2016 2016 S 30 November 201631 December 2016 Late 30 June 2016 2016 S 31 December 201631 December 2016 Early 30 June 2017 2017 S 30 June 2017

7.62 Date of payment - the actual date of each payment to investors must be reported separately regardless of the payment type.For example, if the investment body is operating on a SAP with a 30 April 2016 balancing date, interest payments made between 1 May 2015 and 30 April 2016 to an investor, cannot be aggregated and reported with a single payment date of 30 April 2016.



5 DEFERRED INTEREST SECURITIESSecurities fall into several categories.

Uninscribed stock – these are securities in which investors are not recorded on a register

Inscribed stock – these are securities in which the investors are recorded on a register. These may be transferrable or non-transferrable.

Uninscribed stock is not subject to TFN or AIIR reporting (Taxation Determination TD 92/185). The reporting of inscribed stock varies as discussed below.

The reporting requirements of inscribed stock also varies, depending upon whether the security falls within Part III of Division 16E Section159GP of the ITAA 1936 and it is a qualifying security.

To be a qualifying security:

it must be issued after 16 December 1984 the expected term must exceed or is likely to exceed 12 months the sum of all payments under the security must exceed its issue price (Section 159G(1)

of Division 16E of the ITAA 1936).

The income earned is taxable on an accruals basis as per Division 16E of the ITAA 1936.

This means that accrued interest must be reported annually, as set out in Division 393 of Schedule 1 of the TAA 1953. In addition, the TFN rules relating to TFN or ABN quoting and deduction of withholding tax apply.

IDENTIFICATION OF INVESTMENTS

Payments of interest for transferable deferred interest securities and all non-transferrable eligible securities are to be identified by recording the Type of payment (7.64) field as DIS.

For transferable deferred interest securities the term of investment is also to be at the Term of Investment (7.65) field in the Investment account data record.



REPORTING ARRANGEMENTS

Transferable securities are to be reported as follows: Timing of interest payment Interest reported (period interest not paid)Year 1 NilYear 2 and subsequent years (except final) Nil

Final year Full amount of interest accrued over the term of the security for the relevant investor

If periodic interest is paid on a transferable security this amount must be reported as a separate transaction. As the taxpayer will generally be required to return the interest as it accrues, the final year's report will overstate the assessable income for that investment.

Failure to identify the investment as a deferred interest security (DIS) could result in an unnecessary income discrepancy letter being sent to the client by us.

Non-transferable eligible securities are to be reported as follows:

Timing of interest payment Interest reportedYear 1

Interest paid or liable to be paid plus any accrued interest

Year 2 and subsequent yearsFinal year

The income reported each year should equal the amount of income the taxpayer includes in their tax return. However, it is still advisable to identify the investment as a deferred interest security.



6 CONDUIT FOREIGN INCOME

INCOME DECLARED TO BE CONDUIT FOREIGN INCOME BY AUSTRALIAN CORPORATE TAX ENTITIES

In general terms, conduit foreign income is foreign income that is (ultimately) received by a foreign resident through one or more interposed Australian corporate tax entities.

The conduit foreign income measure, broadly, allows Australian corporate tax entities (companies, corporate limited partnerships, public trading trusts and corporate unit trusts) that are deriving foreign income that is not taxed in Australia to declare all or a portion of an unfranked distribution they make to be conduit foreign income.

Conduit foreign income takes on two forms. When an Australian corporate tax entity receives foreign income that it subsequently pays:

directly to a foreign resident, declaring it to be conduit foreign income (section 802-15 of the Income Tax Assessment Act 1997 (ITAA 1997))

to another Australian corporate tax entity, declaring it as conduit foreign income. The latter entity would normally be a regional holding company for a foreign group and would in turn pass on the amount it received to the overseas parent of the group as conduit foreign income (section 802-20 of the ITAA 1997).

To the extent that an unfranked distribution is declared to be conduit foreign income, the distribution is exempt from withholding tax in the hands of a non-resident member. The member is notified of the portion of the distribution that is declared to be conduit foreign income through the distribution statement.

An unfranked distribution declared to be conduit foreign income received by a resident individual member is treated no differently to a normal unfranked distribution.

TRUST DISTRIBUTIONS OF INCOME DECLARED TO BE CONDUIT FOREIGN INCOME

A provision included in the Tax Laws Amendment (2007 Measures No. 3) Act 2007 ensures that distributions declared to be conduit foreign income are able to flow through trusts to non-resident beneficiaries free of Australian tax.

If an Australian company makes an unfranked distribution that it declares to be conduit foreign income to a trustee, the trustee is not liable to pay tax in relation to a non-resident beneficiary’s share of the net income of the trust that is reasonably attributable to all or part of that distribution.



The non-resident beneficiary must be presently entitled to the share of the trust income that is reasonably attributable to all or part of that unfranked distribution. (Section 802-17(3) of the ITAA 1997).

A non-resident beneficiary is not assessed on its share of the net income of a trust to the extent the share of the net income is reasonably attributable to a distribution declared to be conduit foreign income (section 802-17(1) of the ITAA 1997).



7 INTERPOSED ENTITIESAn interposed entity (the primary investment body) is a third party that is interposed between the investor (the primary investor) and the investment body (the secondary investment body). An entity includes an individual, company, partnership or trust. This section only applies to solicitors, investor directed portfolio services, nominees, custodial services and similar interposed entities that provide an interposed entity service.

The primary investment body has the same reporting responsibilities as the secondary investment body but can meet its reporting obligations by providing the identity details, including full name and TFN or ABN where quoted, of the primary investors to the secondary investment body. Otherwise, the primary investment body must assume full reporting responsibility under section 202DDB of the ITAA 1936.

Amounts of income reported to us by the secondary investment body on behalf of the primary investor will be attributed to the primary investor, when they can be matched to the primary investor. If the primary investment body varies the amount paid to the primary investor, for example, by deduction of fees or other costs, the primary investor should be advised to return the gross amount of income and claim the costs as allowable deductions in their tax return.

REPORTING REQUIREMENTS

If a primary investment body places an investment with a secondary investment body on behalf of another investor who is entitled to receive all or part of the investment income paid to the account, the primary investment body should make its interposed entity status known to the secondary investment body. The name and TFN or ABN of the interposed entity should be reported at the Interposed entity name (7.98) and Interposed entity TFN or ABN (7.99) fields in the Investment account data record.

Providing the name and TFN or ABN of the primary investment body at the interposed entity fields will help to determine whether the reported investor details belong to the primary investor or the interposed entity.

Where a primary investment body makes its own identity details to a secondary investment body in connection with an investment it makes on behalf of another investor who is entitled to receive all or part of the income paid into the account, the primary investment body is required to lodge an AIIR containing the identity and payment details of the investors entitled to receive the income. It cannot assign its reporting obligations to the secondary investment body.Reporting the primary investor's TFN with the primary investment body’s name and address in the Investor data record does not enable the income to be attributed to the primary investor. Neither does reporting the primary investment body as the account holder on behalf of the primary investor when the primary investment body’s TFN or ABN, name and address are reported in the Investor data record. In these cases, the primary investment body is required to lodge an AIIR containing full identity and payment details for each of its primary investors.


Primary investor

Interposed entity

Secondary investment body

Charlotte O’Hare

Tara Lawyers & Assoc

Gable Bank


Reporting the primary investor's TFN with the interposed entity's name and address details does not enable income to be attributed to the primary investor and on its own, does not confirm the interposed entity status of the reported investor.

Below is an example of an interposed entity (primary investment body):

Example 7.1 – Primary investment body provides investor’s details to secondary investment body

Solicitors, Tara Lawyers and Associates (primary investment body) do not wish to take on the responsibility of reporting investment income. Therefore, they provide Charlotte O’Hare's details, including her name and TFN or ABN if quoted, to Gable Bank (secondary investment body) when investing money on her behalf.

Gable Bank reports Charlotte O’Hare's identity and income details in their AIIR and includes the name and TFN or ABN of the interposed entity, Tara Lawyers & Associates, at the Interposed entity name (7.98) and Interposed entity TFN or ABN (7.99) fields. The supply of interposed entity details is essential in the event of Charlotte O’Hare being contacted by us as she may not be aware that Tara Lawyers and Associates have invested her funds with the Gable Bank. The interposed entity information is necessary to provide this link. INVESTMENT ACCOUNT DATA RECORD (EXTRACT) – Gable Bank

Reference number

Field name Content

7.98 Interposed entity name TARA LAWYERS AND ASSOCIATES7.99 Interposed entity TFN or ABN 778889455

INVESTOR DATA RECORD (EXTRACT) – Gable Bank


7.137 Investor entity type I Primary investor’s entity type7.138 Investor tax file number 789456879 Primary investor’s TFN




7.143 Individual investor surname O’HARE Primary investor’s surname

7.142 Individual investor first given name CHARLOTTE Primary investor’s first name

7.144 Individual investor date of birth (DDMMCCYY) 13091962 Primary investor’s date of birth

If the primary investment body, Tara Lawyers and Associates, provides its own identity details to the secondary investment body, it is obliged to lodge an AIIR containing the identity and income details of its primary investors.

All other fields in the Investor Data Record are also those of the primary investor.

Non-resident interposed entities/investors

When a non-resident interposed entity receives income from Australian investments on behalf of primary investors who are also non-residents the Australian investment body withholds amounts from the income paid to the interposed entity. The non-resident entity pays the income (net of withholding tax) to the non-resident primary investors. As the interposed entity is a non-resident for tax purposes, it is not required to lodge an AIIR. The Australian investment body reports the amount of non-resident withholding tax and MIT withholding tax in their AIIR. It would also report other amounts where relevant, including subsection 98(3) and 98(4) ITAA 1936 assessable amounts.

ENTITIES NOT CONSIDERED INTERPOSED ENTITIES

Unit trusts are not interposed entities. The fact that a fund manager may invest pooled capital in a variety of investments is not relevant. The trustee of a unit trust is an investment body in its own right and issues statements to unit holders relating to interest and other forms of income paid as a result of the investment.



8 NON-RESIDENT INVESTOR REPORTING A non-resident for tax purposes is a foreign or non-resident investor who invests in Australia.

Information reported on non-residents is used for compliance purposes and is also exchanged with more than 40 countries with which Australia has a Double Tax Agreement in accordance with OECD guidelines

Investment bodies who have paid investment income to investors who advise they are a non-resident for tax purposes, are also required to report overseas address details including country code and total amounts withheld from interest and dividend payments and managed investment trust fund payments. It is the investor’s responsibility to advise their financial institution of their residency status for tax purposes and their overseas address.

For a full list of country names and country codes go to ato.gov.au and search country codes.

A non-resident for tax purposes investor pays tax differently from residents. Australian residents are generally taxed on their worldwide income from all sources.

In relation to investment income, a non-resident for tax purposes is not entitled to a tax-free threshold, or to claim certain tax offsets or tax credits that are available to residents. Some income may be subject to final withholding tax as follows:

10% withholding tax of any interest earned from Australian bank accounts if a resident of a non-tax treaty country. Some agreements with tax treaty countries provide an exemption from interest withholding tax in certain circumstances.

30% withholding tax from unfranked dividends if a resident of a non-tax treaty country. Most agreements with treaty countries reduce the rate to 15%. Other rates apply if Australia has a tax treaty with that country. Check our website, ato.gov.au for information on which countries Australia has a tax treaty with and the appropriate tax rate for residents of those countries.

Income subject to final withholding tax is not required to be shown on an Australian income tax return if a tax return is required. In both situations, the investor must advise the Australian company of their overseas address so that the lower level of tax can be withheld, otherwise tax must be withheld at the higher rate of 45% and the taxpayer may have to apply to the ATO to recover the overpaid tax.

When franked dividends are received, no tax is withheld as the company has already paid tax on their behalf. These dividends and franking credits are also not included as assessable income.Royalties are also paid to foreign residents and are subject to final withholding tax. The withholding rate is 30%, unless a tax treaty with that country quotes a different rate. These countries and the applicable rates are available on ato.gov.au Most treaties reduce the rate to


https://www.ato.gov.au/General/International-tax-agreements/In-detail/Australian-income-of-non-resident-withholding-obligations/PAYG-withholding-from-interest,-dividends-and-royalties-paid-to-non-residents/?page=25#Australiantaxtreatyrates

https://www.ato.gov.au/General/International-tax-agreements/In-detail/Australian-income-of-non-resident-withholding-obligations/PAYG-withholding-from-interest,-dividends-and-royalties-paid-to-non-residents/?page=25#Australiantaxtreatyrates

https://www.ato.gov.au/


10%. Royalties paid to foreign residents are reported on the PAYG withholding from interest, dividend and royalty payments paid to non-residents - annual report (NAT 7187) not in the AIIR.Always report the overseas address for investors who are non-residents for tax purposes in the overseas address fields in the Investor data record. If an Australian address is also available, report it in the Australian address fields.

Residential or business address details should be reported in preference to postal address.

WITHHELD AMOUNTS FROM NON-RESIDENTS

Amounts withheld from interest and dividend payments are reported at the Non-resident withholding amount deducted (7.68) field regardless of the payment type.

Amounts withheld from Managed investment trust fund payments are reported at the Amounts withheld from managed investment trust fund payments (7.101) field.

RESIDENCY STATUS

Non-resident for tax purposes for the full year

If a non-resident investor for tax purposes is a non-resident for the full year, do not complete the Date of change of residency status from resident to non-resident (7.151) or Date of change of residency status from non-resident to resident (7.159) fields.

Change of residency status during the year

If an investor changes residency status during the financial year, the Date of change of residency status from resident to non-resident (7.151) or the Date of change of residency status from non-resident to resident (7.159) fields should be completed.

If investor data is available for both the period the investor was a non-resident and the period the investor was a resident, provide an Investment account data record and an Investor data record for each period.

If the investor data for both periods is not available and the non-resident investor for tax purposes becomes a:

resident during the year, report the investor as a resident non-resident during the year, report the investor as a non-resident.

The following specific reporting fields in the Investor data record relate to non-resident investors and are required to be completed to ensure the correct information is exchanged with OECD countries:



Reference number Field name

7.138 Investor tax file number (if applicable) or TFN exemption code

7.140 Non-resident investor tax identification number

7.147 Australian address lines 1 and 2 (if available) – do not report overseas address details in the Australian address fields

7.148 Australian suburb, town or locality (if available)

7.149 Australian state or territory (if available)

7.150 Australian postal code (if available)

7.151 Date of change of residency status from resident to non-resident

7.152 Overseas address lines 1 and 2

7.153 Overseas suburb, town or locality

7.154 Overseas state or province

7.155 Overseas postal code (Do not report 9999 in this field unless this is the postcode of the overseas locality)

7.156 Overseas country

7.157 Non-resident investor overseas country code

7.158 Non-resident investor country of residence for tax purposes

7.159 Date of change of residency status from non-resident to resident

Example 8.1 – Change of non-resident investor for tax purposes to resident taxpayer

Genevieve Eriksen holds an interest bearing account with Ashdown Bank Ltd in Perth Australia. Genevieve was a non-resident investor for tax purposes when she lived in Canada. Her residential address, at that time, was 217 Hockey Street, Apartment 28, Montreal H1A 0A1 Quebec. On 3 March 2016, Genevieve returned to live in Perth permanently and changed her residency status from non-resident to resident. As Genevieve has a TFN it is reported instead of the TFN non-resident exemption code of 888888888.

Ashdown Bank Ltd is able to report for the period Genevieve was a non-resident and a resident. For the purposes of this example, only the investor records are shown.

An Investment account data record is required for each Investor data record if the data is available.

INVESTOR DATA RECORD 1 (EXTRACT) – reporting period the investor was a non-resident

Referencenumber

Field name Content

7.138 Investor tax file number 1234567847.140 Non-resident investor tax identification number 8954237897.147 Australian address – line 1 C/- BARTHOLOMEW & KIDD



Referencenumber

Field name Content

7.147 Australian address – line 2 PO BOX 9457.148 Australian suburb, town or locality PERTH7.149 Australian state or territory WA7.150 Australian postcode 6001

7.151 Date of change of residency status from resident to non-resident (DDMMCCYY) 00000000

7.152 Overseas address – line 1 217 HOCKEY STREET7.152 Overseas address – line 2 APARTMENT 287.153 Overseas suburb, town or locality MONTREAL7.154 Overseas state or province QUEBEC7.155 Overseas postal code H1A OA17.156 Overseas country CANADA7.157 Non-resident investor overseas country code CAN7.158 Non-resident investor country of residence for tax purposes CANADA

7.159 Date of change of residency status from non-resident to resident (DDMMCCYY) 03032015

INVESTOR DATA RECORD 2 (EXTRACT) – reporting period the investor was a resident

Referencenumber

Field name Content

7.138 Investor tax file number 1234567847.147 Australian address – line 1 C/- ELISE ERIKSEN7.147 Australian address – line 2 11/21 CARPATHIA AVENUE7.148 Australian suburb, town or locality CITY BEACH7.149 Australian state or territory WA7.150 Australian postcode 6015

7.151 Date of change of residency status from resident to non-resident (DDMMCCYY) 00000000

7.152 Overseas address – line 1 Blank fill7.152 Overseas address – line 2 Blank fill7.153 Overseas suburb, town or locality Blank fill7.154 Overseas state or province Blank fill7.155 Overseas postal code Blank fill7.156 Overseas country Blank fill7.157 Non-resident investor overseas country code Blank fill7.158 Non-resident investor country of residence for tax purposes Blank fill

7.159 Date of change of residency status from non-resident to resident 03032016



9 REPORTING FOR DECEASED INVESTORS When an individual investor has died during the reporting period, it is important that the correct account changes are reported and that reporting for an individual or individuals (where the account was jointly held) is adjusted to reflect the income that belongs to the account holders during the year of income. The income paid or credited up to the date of death and after the date of death should be reported in the proportions according to the ownership of the account at the date the payment is made or credited.

For example, as at the date of death, ownership of the investor’s investment account is treated as follows – for:

individual account holders ownership reverts to the deceased estate joint account holders

– held as joint tenants, the deceased’s ownership is extinguished and ownership is passed to the surviving account holder

– held as tenants in common, the deceased’s share reverts to the deceased’s estate.

There is no requirement to apportion income that has not been paid or credited prior to the date of death.

After notification of the date of death, the following Investor data record reporting requirements apply:

1 Income paid or credited before date of death – individual account


7.137 Investor entity type D = Deceased7.138 Investor tax file number Investor’s TFN7.141 Individual investor surname Investor’s surname7.142 Individual investor first given name Investor’s first given name7.143 Individual investor second given name Investor’s second given name7.146 Non-individual investor name Blank fill

2 Income paid or credited after date of death

a) No formal trust but change of account name to non-individual name


7.137 Investor entity type O = Other7.138 Investor tax file number Investor’s TFN7.141 Individual investor surname Blank fill




7.142 Individual investor first given name Blank fill7.143 Individual investor second given name Blank fill

7.146 Non-individual investor name Informal Trust’s name ie ‘The estate of …’

b) Formal trust


7.137 Investor entity type T = Trust7.138 Investor tax file number Trust’s TFN7.141 Individual investor surname Blank fill7.142 Individual investor first given name Blank fill7.143 Individual investor second given name Blank fill7.146 Non-individual investor name Trust’s name

For the purpose of the examples below mandatory fields and those not relevant to the specific circumstances of the example have not been included.

Example 9.1 – Single account when a formal trust has been established – interest paid after date of death

The Southbank Credit Union was notified of the death of Katy Regan-Jones on 1 March 2016. Interest of $130.00 was paid on 1 June 2016. A formal trust, Katy Regan-Jones Trust, TFN 965477891, was established to administer the estate. Southbank Credit Union does not report an Investment account data record or Investor data record for Katy Jones.


Reference number Field name Content

7.59 Account name KATY REGAN-JONES TRUST7.62 Date of payment (DDMMCCYY) 010620167.64 Type of payment INT7.71 Interest (cents) 000000013000



7.137 Investor entity type T7.138 Investor tax file number 9654778917.141 Individual investor surname Blank fill7.142 Individual investor first given name Blank fill




7.143 Individual investor second given name Blank fill7.146 Non-individual investor name KATY REGAN-JONES TRUST

Example 9.2 – Joint account when one investor dies - no interest paid before date of death

Joint account is held by resident individuals Maxwell & Leonie Mansworthy. An interest payment of $97.00 is paid on 1 December 2015. Leonie Manning died in October 2015. Robert, TFN 456123789, does not open a new account or change the account name.



7.59 Account name MAXWELL & LEONIE MANSWORTHY

7.62 Date of payment (DDMMCCYY) 011220157.64 Type of payment INT7.71 Interest (cents) 000000009700



7.137 Investor entity type I7.138 Investor tax file number 4561237897.141 Individual investor surname MANSWORTHY7.142 Individual investor first given name MAXWELL7.143 Individual investor second given name Blank fill7.146 Non-individual investor name Blank fill

Example 9.3 – Joint account when one investor dies - interest paid before and after date of death

Joint account is held by resident individuals Jon and Gretel Harris. Interest is paid bi-annually on 1 December 2015 and 1 June 2016. A statement of account with an interest payment of $200.00 was issued on 5 December 2015. Jon Harris, TFN 987654321, died in March 2016. On 1 June 2016 another $200.00 was credited to the account. Gretel, TFN 187123655, does not open a new account or change the account name.

Two Investment account data records and three Investor data records are required:The first Investment account data record would report the payment of interest before the date of death accompanied by two Investor data records.



The second would report the payment after the date of death accompanied by one Investor data record as follows:

INVESTMENT ACCOUNT DATA RECORD 1 (EXTRACT) - reporting payment before date of death


7.59 Account name J & G HARRIS7.62 Date of payment (DDMMCCYY) 011220157.64 Type of payment INT7.71 Interest (cents) 000000020000

INVESTOR DATA RECORD 1 (EXTRACT) – Jon Harris


7.137 Investor entity type D7.138 Investor tax file number 9876543217.141 Individual investor surname HARRIS7.142 Individual investor first given name JON7.143 Individual investor second given name Blank fill7.146 Non-individual investor name Blank fill

INVESTOR DATA RECORD 2 (EXTRACT) –Gretel Harris


7.137 Investor entity type I7.138 Investor tax file number 1871236557.141 Individual investor surname HARRIS7.142 Individual investor first given name GRETEL7.143 Individual investor second given name Blank fill7.144 Individual investor date of birth (DDMMCCYY) 271019627.146 Non-individual investor name Blank fill

INVESTMENT ACCOUNT DATA RECORD 2 (EXTRACT) – reporting payment after date of death


7.59 Account name J & G HARRIS7.62 Date of payment (DDMMCCYY) 010620167.64 Type of payment INT7.71 Interest (cents) 000000020000

INVESTOR DATA RECORD 3 (EXTRACT) –Gretel Harris




7.137 Investor entity type I7.138 Investor tax file number 1871236557.141 Individual investor surname HARRIS7.142 Individual investor first given name GRETEL7.143 Individual investor second given name Blank fill7.144 Individual investor date of birth (DDMMCCYY) 271019627.146 Non-individual investor name Blank fill



10 UNIT TRUST DISTRIBUTIONSInvestment bodies that are unit trusts are required to lodge an AIIR. These are trusts where the interests of beneficiaries are denominated by units that can often be bought and sold in a way similar to trading in shares in a company. Unit trusts are used in many commercial arrangements, including managed investment schemes.

Unit trusts can be cash management trusts, pooled super funds, mortgage trusts, property trusts, share trusts, growth trusts, imputation trusts, balanced trusts, money market trusts, managed investment schemes, managed funds, bond funds, growth funds, income funds, share funds, other wholesale and retail funds and unit trust schemes typically distributing income that is subject to varying forms of tax treatment.

Investment products offered through other trusts or custodians (including Investor directed portfolio services (IDPS)) may be required to lodge an AIIR to report investment income that often includes unit trust distributions, including fund payments and other investment types such as dividends and interest. Another type of product that can include unit trust distributions is a stapled security.

This section includes a number of examples for reporting unit trust distributions in the AIIR including franked and unfranked distributions, capital gains, stapled securities and IDPS data.

WHAT CAN BE INCLUDED IN A UNIT TRUST DISTRIBUTION

As well as assessable net Australian income, distributions can include:

capital gains foreign source income foreign tax credits tax exempted, tax-free and tax-deferred amounts.

Generally an expense should first be offset against the income item that best represents the expense incurred. If the expense exceeds the income then the balance should be offset against other income items on a reasonable basis. Should the expense exceed all income items, then any excess can be offset against a capital gain (if any). If the expense cannot be matched against an item of income, for example, an administrative expense in managing the investment, then the expense should be apportioned against all income items on a reasonable basis.

If the investment body is a trust then an amount of negative return (a loss) cannot be distributed and must be carried forward to a future year.

The table on pages 32-33 identifies the investment income fields that are reported for UTD payment type. Although repayments of principal can be part of the distribution made to clients, this principal amount is not investment income and should not be reported in the AIIR.



Distributions from corporate unit trusts and public trading trusts

Corporate unit trusts and public trading trusts, whose distributions to unit holders are treated as dividends for income tax purposes, should report these amounts at the appropriate dividend amount fields and report DIV (not UTD) at the Type of payment (7.64) field.

REPORTING

Mandatory requirement

All AIIRs that include trust distributions must supply:

an Investment account data record and a Supplementary income account data record

The Supplementary income account data record is not an optional data record and is required even if the fields in this data record are not populated.

Details of the various taxable net income and other components of the trust distribution are identified by setting the Type of payment (7.64) field to UTD in the Investment account data record. Failure to do so is likely to result in discrepancies between amounts reported in the AIIR and amounts declared in investor’s tax returns.

Additional information

Where possible, field names within the AIIR where the Type of Payment (7.64) field = UTD are aligned to the label names in the ITR and Standard distribution statement (SDS) to minimise the risk of misreporting the same income in different reports.

Section 11 contains additional information on the alignment between the AIIR, ITR and SDS

Appendix B shows the relationship between AIIR account data fields, the ITR and the SDS.

7.77 Non-primary production income - the sum of the amounts reported at the following fields is reported at this field:

Interest (7.71) plus Unfranked distributions from trusts (7.113) plus Other taxable Australian income (7.76) less Other allowable trust deductions (7.93).



7.113 Unfranked distributions from trusts – the amount reported in this field equals the amount of the dividend distribution that is unfranked.

We have coined the term ‘unfranked distribution’ to describe the amount of dividends received that are not part of a franked distribution.

This field will be the sum of amounts reported at Unfranked dividends not declared to be conduit foreign income (7.72) and Unfranked dividends declared to be conduit foreign income (7.73) unless your systems have been set up to trace and report franked distributions.

7.114 Franked distributions from trusts - the amount reported in this field equals the amount of franked distributions from trusts and the franking credit. This field will be the sum of Franked dividends (7.74) and Franking credit (7.75) unless your systems have been set up to trace and report franked distributions.

For the purpose of the examples below, mandatory fields and those not relevant to the specific circumstances of the example have not been included.

Example 10.1 – Non-primary production income and a fully franked distribution

Azzopardi Infrastructure Trust is reporting the following distribution for resident investor Melody Johannson:

Interest of $8,279.00 Other taxable Australian income of $4,620.00 Unfranked distribution that was made up of non-CFI dividend of $7,000.00 Other allowable trust deductions of $1,810.00 Franked dividends of $10,150.00 with a franking credit of $4,350.00.



7.59 Account name MELODY JOHANNSON7.62 Date of payment (DDMMCCYY) 300620167.63 Type of investment 057.64 Type of payment UTD7.71 Interest (cents) 000000827900

7.72 Unfranked dividends not declared to be conduit foreign income (cents) 000000700000

7.73 Unfranked dividends declared to be conduit foreign income (cents) 000000000000

7.74 Franked dividends (cents) 0000010150007.75 Franking credit (cents) 0000004350007.76 Other taxable Australian income (cents) 0000004620007.77 Non-primary production income (cents) 000001808900




7.93 Other allowable trust deductions (cents) 000000181000

SUPPLEMENTARY INCOME ACCOUNT RECORD (EXTRACT)


7.113 Unfranked distributions from trusts (cents) 0000007000007.114 Franked distributions from trusts (cents) 000001450000

One Investor data record is required for Sequence number of DACCSUPP record 01.

See Section 11, Alignment between the AIIR, SDS and the ITR for examples of reporting franked and unfranked distributions in the AIIR and SDS.

Capital Gains Tax (CGT)

Capital gains distributions are reported using the following fields. An investor can receive a distribution calculated by using more than one capital gain method and it can include income from Australian and foreign sources.

7.79 Capital gains discounted method - the amount of capital gain included in the investor’s share of the net income distributed after the 50% discount has been applied.

For example, if the capital gain before discount equals $1000.00, the amount reported at this field equals $500.00 – that is the amount is not ‘grossed up’.

7.80 Capital gains indexation method - the amount of the capital gain included in the investor’s share of net income distributed after applying the indexation method.

7.81 Capital gains other method - the amount of capital gain included in the investor’s share of net income distributed where the trustee has not applied the indexation or discount method.

Fields 7.79, 7.80 and 7.81 form part of the calculation of the Net capital gain (7.83) and Total current year capital gains (7.84) fields.

7.82 CGT concession amount - the amount comprises the non-assessable CGT discount amount paid to the investor. 7.83 Net capital gain - the amount equals the sum of the amounts reported at the following fields:

Capital gains discounted method (7.79) Capital gains indexation method (7.80) Capital gains other method (7.81).



7.84 Total current year capital gains - the total amount of Australian and foreign sources income subject to CGT.

This amount is equal to or greater than the sum of the following fields:

Capital gains discounted method (grossed up amount) (7.79) Capital gains indexation method (7.80) Capital gains other method (7.81).

This amount will be greater than the sum of the above fields when Capital gains discounted method (7.79) is reported due to the grossing up of that amount.

7.85 Taxable foreign capital gains - the amount that is deemed to be foreign income under Division 770 of the ITAA 1997.

Although this amount is also a component of the above fields when there is a foreign sourced capital gain, there is a requirement to also report these amounts separately for foreign income tax offset calculations.

Example 10.3 – Total capital gains is more than net capital gains

Blues Unit Trust has 10 units and 10 investors – one unit is distributed to each investor.

Income available for distribution:

Trust income $ $Discounted capital gains 1,000Other gains 1,000

Less capital losses 500 500Net capital gain 1,500Total current year capital gains 2,500

The amount reported in the AIIR for each investor:

ReferenceNumber

Field name Amount Workings

7.79 Capital gains, discounted method $100 $1,000/107.81 Capital gains other method $50 $500/10

7.83 Net capital gain $150 $1,500/10(7.79 + 7.81)

7.84 Total current year capital gains $250 $2,500/10(7.79 ‘grossed up’ + 7.81)



Example 10.4 – Total capital gains equals net capital gains

Maroon Unit Trust has 10 units and 10 investors – one unit is distributed to each investor.

Income available for distribution:

Trust income Amount WorkingsOther gains $700Net capital gain $700Total current year capital gains $700

The amount reported in the AIIR for each investor:

ReferenceNumber

Field name Amount Workings

7.81 Capital gains other method $70 $700/107.83 Net capital gain $70 $700/10 (7.81)7.84 Total current year capital gains $70 $700/10 (7.81)

Investor Directed Portfolio Services

IDPS are services for acquiring and holding investments that generally involve custody arrangements and consolidated reporting. There is often a menu of investment products available through this service including trust distributions, dividends and interest related investments.

These services include products typically marketed as master funds and wrap accounts. A distinguishable feature of IDPS is the investor generally makes all the investment decisions, including acquiring, holding and withdrawing from a range of investment products. The trustee of an IDPS is operating as an intermediary and supplies the trustee TFN to the investment body rather than the investor’s TFN. When supplying an AIIR, an IDPS is required to provide an Investment account data record (and Supplementary income account data record (if required)) followed by an Investor data record for each investment type.

The following example shows the recommended way for an IDPS to lodge an AIIR on behalf of its investors. By lodging an AIIR, the IDPS’s investors’ income will be made available for pre-filling.

Example 10.5 – IDPS reporting in the AIIR

Thirdwest Direct, an IDPS, makes the following payments to resident investor Kuan Ziang:

Term Deposit Interest $7,109.00

Dividend payments:



Unfranked dividends (non-CFI) $3,000.00 Unfranked dividends (CFI) $1,700.00 Franked dividends $6,000.00 Franking credits $2,571.00

Trust distribution:

A franked distribution of $2,000.00 An unfranked distribution of $8,000.00 that was made up of an unfranked dividend (non-CFI) of $3,000.00 and an unfranked dividend (CFI) of $5,000.00

Interest of $890.00, other taxable Australian income of $1,200.00 and other allowable trust deductions of $2,100.00

INVESTMENT ACCOUNT DATA RECORD 1 (EXTRACT)


7.54 Sequence number of DACCOUNT record 017.55 Investment reference number 45872214447.56 Account reference number 32145669777.62 Date of payment (DDMMCCYY) 300620167.63 Type of investment 027.64 Type of payment TDP7.71 Interest (cents) 000000710900

An Investor data record is required following Sequence number of DACCOUNT record 01.



7.54 Sequence number of DACCOUNT record 027.55 Investment reference number 45872214447.56 Account reference number 32145669777.59 Account name KUAN ZIANG7.62 Date of payment (DDMMCCYY) 300620167.63 Type of investment 067.64 Type of payment DIV



7.74 Franked dividends (cents) 0000006000007.75 Franking credit (cents) 000000257100

An Investor data record is required following Sequence number of DACCOUNT record 02.





7.54 Sequence number of DACCOUNT record 037.55 Investment reference number 45872214447.56 Account reference number 32145669777.59 Account name KUAN ZIANG7.62 Date of payment (DDMMCCYY) 300620157.63 Type of investment 057.64 Type of payment UTD7.71 Interest (cents) 000000089000



7.74 Franked dividends (cents) 0000002000007.75 Franking credit (cents) 0000000900007.76 Other taxable Australian income (cents) 0000001200007.77 Non-primary production income (cents) 0000007990007.93 Other allowable trust deductions (cents) 000000210000




One Investor data record is required following Sequence number of DACCSUPP record 01.

The ATO is aware that some intermediaries provide consolidated statements to clients. The ATO neither approves nor disapproves this practice. The way of reporting the above example if the IDPS has aggregated all of the investments into one standard distribution advice would be as follows.

Example 10.6 – IDPS consolidated reporting in the AIIR



7.54 Sequence number of DACCOUNT record 017.55 Investment reference number 45872214447.56 Account reference number 32145669777.57 BSB number 000000




7.58 Branch location Blank fill7.59 Account name KUAN ZIANG7.62 Date of payment (DDMMCCYY) 300620157.63 Type of investment 057.64 Type of payment UTD7.71 Interest (cents) 000000799900



7.74 Franked dividends (cents) 0000008100007.75 Franking credit (cents) 0000003471007.76 Other taxable Australian income (cents) 0000001200007.77 Non-primary production income (cents) 0000019799007.93 Other allowable trust deductions (cents) 000000210000





Stapled Securities

A stapled security is created when two or more different securities such as units in a unit trust and shares in one company are contractually bound together and cannot be sold separately. The controlling entity is required to supply an AIIR.

Although the securities cannot be sold separately they are treated separately for tax purposes. When reporting stapled security income in the AIIR, the dividend payments and unit trust distributions must be reported in separate Investment account data records, each followed by an Investor data record. A Supplementary income account data record must also be provided when reporting unit trust distributions.

Example 10.7 – Stapled securities (dividend payments and trust distribution)

Forestwade Group Trust is reporting stapled securities (dividends and trust distribution) for resident investor Raphael East.

Dividend payments:



Unfranked dividends (non-CFI) $1,000.00 Unfranked dividends (CFI) $500.00 Franked dividends $1,000.00 Franking credits $429.00

Trust distribution:

A partially franked dividend of $4,000.00 that was franked to 80%. The franked amount was $3,200.00, the unfranked amount was $800.00 (non-CFI) and the franking credit was $1,371.00

An unfranked distribution of $2,000.00 that was made up of an unfranked dividend (non-CFI) of $2,000.00



7.54 Sequence number of DACCOUNT record 017.55 Investment reference number 9639634447.56 Account reference number 455467.59 Account name RAPHAEL EAST7.62 Date of payment (DDMMCCYY) 300620167.63 Type of investment 067.64 Type of payment DIV



7.74 Franked dividends (cents) 0000001000007.75 Franking credit (cents) 000000042900

An Investor data record is required following Sequence number of DACCOUNT record 01.INVESTMENT ACCOUNT DATA RECORD 2 (EXTRACT)


7.54 Sequence number of DACCOUNT record 027.55 Investment reference number 9639634447.56 Account reference number 455467.59 Account name RAPHAEL EAST7.62 Date of payment (DDMMCCYY) 300620157.63 Type of investment 057.64 Type of payment UTD


7.73 Unfranked dividends declared to be conduit foreign income 000000000000




(cents)7.74 Franked dividends (cents) 0000003200007.75 Franking credit (cents) 0000001371007.77 Non-primary production income (cents) 000000200000



7.103 Supplementary income payment type UTD7.104 Sequence number of DACCSUPP record 017.113 Unfranked distributions from trusts (cents) 0000002000007.114 Franked distributions from trusts (cents) 000000537100




11 ALIGNMENT BETWEEN THE AIIR, SDS AND THE ITR The SDS is the format recommended by the ATO, the Financial Services Council and Australian Custodial Services Association for disclosure by managed funds of tax information to certain resident individuals holding units on capital account for completion of their tax returns, relevant schedules and other requirements.

A new tax system for managed investment trusts (MITs) has been enacted which will apply from 1 July 2016. However, a trustee of a MIT may choose to apply those rules from 1 July 2015. The 2016 SDS format can be used by MITs who have elected to apply the new rules however the statement should be identified as an Attribution managed investment trust member’s annual statement (AMMA statement).

Funds should apply the relevant provisions of the income tax law in preparation of the statement.

SDS – Division 6 of Part III of ITAA 1936.

AMMA - Subdivision 276-H - AMMA statements of ITAA 1997.Investment bodies also report the account information supplied in the SDS or AMMA (statement) to us through the AIIR in both the Investment account data record and the Supplementary income account data record.

One of the objectives of the AIIR is to align the information reported in the AIIR with the information reported in the statement. This enables us to:

continue to increase the data available to pre-fill minimise the risk of incorrect post-compliance action through misreporting of data assist investors to complete their tax return with more accurate information.

Basic structure

The basic structure of the statement consists of three parts:

Part A of the 2016 statement explains where amounts are shown on the Tax return for individuals (supplementary section) 2016..

Most common income reported in Part A:- Share of non-primary production income- Franked distributions from trusts- Other deduction relating to non-primary production distributions- Share of franked credit from franked dividends- Share of credit for tax file number amounts withheld from interest, dividends and

unit trust distributions



- Total current year capital gains- Net capital gain- Assessable foreign source income- Other net foreign source income- Foreign income tax offset

Other labels that may be included:- Share of primary production income- Other deductions relating to distributions- Share of credit for tax withheld where Australian business number not quoted- Share of credit for amounts withheld from foreign resident withholding- Share of National rental affordability scheme tax offset- CFC income- Net foreign rent- Australian franking credits form a New Zealand franking company

Only include the labels that are relevant to your circumstances.

Part B explains the components of a distribution that investors may need to know to work out their net capital gain or capital loss and specifically provides the capital gains tax (CGT) concession amount. It also includes tax-deferred amounts required to adjust the cost base and reduced cost base of their units.

Income reported in Part B:- Capital gains: discounted method

- Capital gains: other method

- Total current year capital gains

- CGT concession amount

- Tax-deferred amounts

For investors with straightforward circumstances the information in parts A and B should be sufficient to complete their tax return.

Part C allows a reconciliation of the net cash amount distributed to the unit holder and provides information relevant to adjustments to the cost base and reduced cost base. It includes all non-assessable amounts: CGT concession, tax-exempted, tax-free and tax-deferred amounts.



Alternative Presentations of Part C

After consultation with industry in 2014 two options were developed for Part C.

Option 1 is the preferred option and shown in Part C i.e. franked distributions are equal to the sum of the franked amount of the dividend and franking credit.

Option 2 is for funds that have their systems set up to trace and report the franked and non-franked portions of franked distributions. This option accommodates when an unfranked distribution is not 100% franked and is shown in attachment 1 of the SDS guidance notes.

Funds can use either option depending on their circumstances.

Further information on completing the SDS can be found on ato.gov.au

Aligning AIIR reporting with the SDS

The example 2016 statement extracts used in this section are based on the 2016 AIIR (v10), SDS and ITR and also provides instructions on how to align AIIR reporting for the two alternative presentations for completing Part C.

Example 11.1

A managed fund provides a statement to a resident investor for distributions.

Option 1 (Part C) – preferred option

2016 SDS and ITR (EXTRACT)

Part A: Summary of 2016 tax return (supplementary section) items

Tax return (supplementary section) Amount $Tax

return label

AIIR reference number

Share of non-primary production income less capital gains, foreign income and franked distributions

65 13U 7.77

Franked distributions from trusts 100 13C 7.114*Other deductions relating to non-primary production distributions 4 13Y 7.78

Share of franking credit from franked dividends 30.00 13Q 7.75Share of credit for TFN amounts withheld from interest, dividends and unit trust distributions 10.00 13R 7.66 minus 7.67

Total current year capital gains 225 18H 7.84Net capital gain 155 18A 7.83Assessable foreign source income 220 20E 7.86


https://www.ato.gov.au/tax-professionals/tp/2015-standard-distribution-statement--guidance-notes-for-fund-managers/



return label


Other net foreign source income 220 20M 7.87Foreign income tax offsets 38.00 20O 7.88*In the AIIR for this option, the amount reported at this field is equal to the sum of the amounts reported at the Franked dividends (7.74) and Franking credit (7.75) fields.

Part B: CGT information – additional information for item 18

Capital Gains Labels Amount $Tax

return label


Capital gains: discounted method 14018

7.79*(grossed up amount)

Capital gains: other method 85 7.81Total current year capital gains 225 7.84CGT concession amount 70 7.82Tax-deferred amounts 30 7.92*The amount of capital gains discounted using this method is 50%. Calculate the grossed up amount by multiplying the discounted amount (7.79) by 2.

Part C: Components of distribution

Income componentCash

distribution $

Tax paidor tax

offsets $

Taxableamount

$


Australian income Franking credits

Dividends: Unfranked amount 60 60 7.72 + 7.73= 7.113*

Interest 20 20 7.71Other income 15 15 7.76Less Other allowable trust deductions - 30** -30 7.93Non-primary production income (A)7.71+7.113+7.76-7.93 65 65 7.77

Dividends: Franked amount (Franked distributions ) (X) 70 30.00 100 7.74 + 7.75 =

7.114

Capital gainsForeign income tax offset

Discounted capital gain 65 5.00 70 7.79CGT concession amount 70 0 7.82Capital gains: other method 83 2.00 85 7.81Distributed capital gains (B) 218 7.00 225 7.84Net capital gain 155 7.83Foreign incomeAssessable foreign source income 189 31 220 7.86




distribution $

Tax paidor tax

offsets $

Taxableamount

$


Cash distribution (C) 189 38 7.88 (offset)Cash distribution sub-total (add A, X, B and C) 542Other non-assessable amountsTax-exempted amounts 25 7.90Tax-free amounts 15 7.91Tax-deferred amounts 30 7.92Gross cash distribution 612Other deductions from distributionTFN amounts withheld -10** 7.66 less 7.67Other expenses -4** 7.78Net cash distribution 598

*Although not reported in the preferred option of the statement in the AIIR Unfranked distributions from trusts (7.113) must always be completed if there are any unfranked dividends reported at fields 7.72 or 7.73 as the amount reported at field 7.113 is used in the calculation of Non-primary production income. **The negative symbol is displayed here to identify a deduction and should not be reported in the AIIR.

Option 2 – Different method to calculate Franked Distribution in Part C (SDS attachment 1)

This option has the same underlying dividend distributions as option 1, however in this example, the fund is able to trace and report the franked and unfranked portions of the franked distributions. This will result in different amounts reported at the Non-primary production income (7.77) and Franked distribution from trust (7.114) fields from Option 1 and include a new field Unfranked distributions from trusts (7.113) in Part C.

Part A: Summary of 2016 tax return (supplementary section) items


return label


Share of non-primary production income less capital gains, foreign income and franked distributions

45 13U 7.77

Franked distributions from trusts 120 13C 7.114*Other deductions relating to non-primary production distributions 4 13Y 7.78

Share of franking credit from franked dividends 30.00 13Q 7.75Share of credit for TFN amounts withheld frominterest, dividends and unit trust distributions 10.00 13R 7.66 minus 7.67

Total current year capital gains 225 18H 7.84Net capital gain 155 18A 7.83Assessable foreign source income 220 20E 7.86Other net foreign source income 220 20M 7.87




return label


Foreign income tax offsets 38.00 20O 7.88*In the AIIR for this option, the amount reported at this field is equal to the sum of the amounts reported at the Franked dividends (7.74) and Franking credit (7.75) fields.

Part B: CGT information – additional information for item 18

Capital Gains Labels Amount $Tax

return label


Capital gains: discounted method 14018

7.79*(grossed up amount)

Capital gains: other method 85 7.81Total current year capital gains 225 7.84CGT concession amount 70 7.82Tax-deferred amounts 30 7.92*The amount of capital gains discounted using this method is 50%. Calculate the grossed up amount by multiplying the discounted amount (7.79) by 2.

Part C: Components of distribution


distribution $

Tax paidor tax

offsets $

Taxableamount

$


Australian income Franking credits

Dividends: Franked amount 70 30 100 7.74 + 7.75Dividends: Unfranked amount 60 60 7.72 + 7.73Total dividend 130 30 160Less Franked distribution (X) = 7.74 + 7.75 90 30 120 7.114Unfranked distribution* 40 40 7.113Interest 20 20 7.71Other income 15 15 7.76Less Other allowable trust deductions - 30** -30 7.93Non-primary production income (A) =7.113+ 7.71+7.76-7.93 45 45 7.77

Capital gainsForeign income tax offset

Discounted capital gain 65 5.00 70 7.79CGT concession amount 70 0 7.82Capital gains: other method 83 2.00 85 7.81Distributed capital gains (B) 218 7.00 225 7.84Net capital gain 155 7.83




distribution $

Tax paidor tax

offsets $

Taxableamount

$


Foreign incomeAssessable foreign source income 189 31 220 7.86Cash distribution (C) 189 38 7.88 (offset)Cash distribution sub-total (add A, X, B and C) 542Other non-assessable amountsTax-exempted amounts 25 7.90Tax-free amounts 15 7.91Tax-deferred amounts 30 7.92Gross cash distribution 612Other deductions from distributionTFN amounts withheld -10** 7.66 less 7.67Other expenses -4** 7.78Net cash distribution 598

*This field is used in the AIIR to describe the amount of dividends that are not part of a franked distribution. You can leave this term out of the statement however there is a requirement to report this amount in the AIIR. **The negative symbol is displayed here to identify a deduction and should not be reported in the AIIR.

Reporting distributions in the AIIR

Option 1 and 2 would be reported using the Investment account data record and the Supplementary income account data record as follows:

INVESTMENT ACCOUNT DATA RECORD FIELDS (EXTRACT)

Refnumber Field name Option 1 Option 2

7.66 TFN withholding tax deducted (cents) $10.00 $10.00

7.67 TFN withholding tax refunded (cents) $0.00 $0.007.71 Interest (cents) $20.00 $20.007.72 Unfranked dividends not declared to be conduit foreign income (cents) $40.00 $40.007.73 Unfranked dividends declared to be conduit foreign income (cents) $20.00 $20.007.74 Franked dividends (cents) $70.00 $70.007.75 Franking credit (cents) $30.00 $30.007.76 Other taxable Australian income (cents) $15.00 $15.007.77 Non-primary production income (cents) $65.00 $45.00

7.78 Other deductions relating to distributions (cents) $4.00 $4.00

7.79 Capital gains discounted method (cents) $70.00 $70.00

7.80 Capital gains indexation method (cents) $0.00 $0.00

7.81 Capital gains other method (cents) $85.00 $85.00

7.82 CGT concession amount (cents) $70.00 $70.00

7.83 Net capital gain (cents) $155.00 $155.00




7.84 Total current year capital gains (cents) $225.00 $225.00

7.85 Taxable foreign capital gains (cents) $0.00 $0.00

7.86 Assessable foreign source income (cents) $220.00 $220.00

7.87 Other net foreign source income (cents) $220.00 $220.00

7.88 Foreign income tax offset (cents) $38.00 $38.00

7.89Australian franking credits from a New Zealand franking company (cents) $0.00 $0.00

7.90 Tax-exempted amounts (cents) $25.00 $25.00

7.91 Tax-free amounts (cents) $15.00 $15.00

7.92 Tax-deferred amounts (cents) $30.00 $30.007.93 Other allowable trust deductions (cents) $30.00 $30.00

SUPPLEMENTARY INCOME ACCOUNT DATA RECORD (EXTRACT)


7.113 Unfranked distributions from trusts (cents) $65.00 $45.007.114 Franked distributions from trusts (cents) $100.00 $120.00



12 FARM MANAGEMENT DEPOSITSThe Farm management deposit (FMD) scheme enables eligible primary producers to deduct from their assessable income the amount of FMDs made in an income year. This enables primary producers to claim a tax deduction for FMDs and for before-tax income to be carried over from years of good cash flow to later years so they can better manage their exposure to seasonal fluctuations.

The deposits must normally remain invested for at least 12 months. The total amount of repayments is included in assessable income in the income year in which it is repaid. Deposits electronically transferred between FMD providers, deposits that are reinvested and deposits that are consolidated after 12 months maintain their FMD status.

An eligible primary producer can open an FMD account with any Authorised deposit-taking institution (ADI) including most banks, credit unions and building societies. An FMD account can be held with more than one ADI at the same time. The minimum deposit is $1,000 and the total on deposit must not exceed $400,000 at any one time. All ADIs offering FMD accounts must also report monthly to the Department of Agriculture (DA).

An FMD account owner may make multiple repayments in a financial year. The minimum repayment amount is $1,000 unless the account is being closed and the balance is less than $1,000.

An FMD account can only be held by one individual. Interest income from FMDs is assessable in the income year it is paid and must be reported in the Farm management deposit account data record. Interest earnings must be paid to the FMD owner before reinvesting as a new FMD.

The usual reporting provisions associated with investments also apply to FMDs. TFNs or ABNs quoted by investors must be reported in the Quarterly tax file number and Australian business number report.

From the 2014 financial year FMDs can only be reported using the AIIR v10 ERS or later versions.

LEGISLATIVE CHANGES

Several legislative changes to FMDs take effect from 1 July 2016. Not all of these changes impact 2016 AIIR reporting however a new field will be added to the next version (v11.0) of the reporting specification to accommodate the first point below

An FMD deposit will retain its deductible status when the interest earned on the account is offset against a primary production related loan or debt.

Early access provisions for drought affected areas were reinstated from 1 July 2016. This is declared on the individual’s income tax return.



The cap on FMDs that can be held by primary producers has been increased from $400,000 to $800,000.

Consolidation

From 1 July 2014 two or more deposits can be consolidated into a single FMD deposit without changes to the tax concessions providing:

amounts being consolidated have been held for at least 12 months and

the account holder has claimed a tax deduction for those amounts.

Consolidation is not mandatory and it is the responsibility of the account holder to ensure the above conditions are met before FMD deposits are consolidated.

REPORTING

All FMD transactions, including interest, are reported in the FMD account data record. FMD providers do not report an Investment account data record however a separate Investor data record is required for each FMD account data record even where multiple FMD account data records are lodged for the same account.

A number of changes have been made to FMD reporting in the AIIR for the 2014–15 reporting period onwards to:

accommodate the reporting of consolidated FMDs simplify reporting, where possible, to minimise compliance costs for FMD providers

including reporting of: debit and credit transactions where the specific transaction type cannot be

determined partial date fields (excluding Date of payment) maximising the number of debit / credit transactions to be reported before a

separate FMD account data record is required clarifying definitions e.g. deductibility of deposits is determined by the account holder

The data fields have not been changed and there is no change in the requirement to report mandatory fields.

The tables below provide a quick reference of the data types to be reported.



Mandatory requirements

All FMD providers must report a FMD account data record each year to advise the closing balance at the end of the financial year regardless of whether any interest or movements in principal have occurred.

The mandatory fields to be completed for every record, even when a second record is provided for the same account, are:

ReferenceNumber Field Name Requirements

7.115 Record identifier Must equal DFMDACCT7.116 Sequence number of

DFMDACCT recordThe sequence number of the FMD account data record in the AIIR file.

7.117 Sequence number of multiple DFMDACCT records

If only one FMD account data record is lodged for an account this field must equal 01.

This field will be greater than 01 where more than one FMD account data record is lodged for the same Investment reference number.

7.55 Investment reference number

The account number or other number that appears on the FMD owner’s account statement.

7.59 Account name The full name of the investment account7.118 *Personal identification

number (PIN)This number uniquely identifies the FMD owner in reports to DA, as those reports cannot disclose the identity of the FMD owner. This number remains the same while the FMD owner holds any deposits with the FMD provider. The field length and format of this number may vary between FMD providers.

7.119 *ANZSIC code The industry code for the FMD owner by reference to the Australian and New Zealand Standard Industrial Classification.

7.132 *Amount of closing balance

This amount is the closing balance as at midnight on 30 June each financial year. If multiple FMD account data records are lodged for the same account this amount will be the same in each data record. It is not a running balance.

*These items are also supplied in your monthly report to DA, who with the ATO, jointly administer the FMD scheme and exchange information other than the identity of the FMD owner.



Interest payments

Interest paid or credited is reported in the FMD account data record. Do not report any interest again in a second FMD account data record for the same Investment reference number as this may cause the record to be rejected or pre-fill errors in your client’s tax return.

The interest fields to be completed for the account are:


7.62 Date of payment The date the interest amount was paid or credited. If more than one interest payment is made during the financial year, the date of payment should be set to 3006CCYY.

7.63 Type of investment Must equal 27.64 Type of payment Must equal FMD7.71 Interest Interest amounts paid or credited. If more than one interest

payment is made during a financial year, the amounts must be aggregated.

7.66 TFN withholding tax deducted

This field is completed if the FMD owner does not quote a TFN or ABN. Interest paid or credited is subject to withholding tax at the top marginal rate plus the Medicare levy. If tax is withheld from more than one interest payment during a financial year, the amounts must be aggregated.

7.67 TFN withholding tax refunded

Report any TFN or ABN withholding amounts refunded from interest paid or credited that has been offset by TFN withholding tax remitted at this field. If more than one refund is made during a financial year, the amounts must be aggregated.

This field is completed if the TFN withholding tax refunded is stored separately otherwise the net amount of TFN withholding tax deducted is reported at field 7.66.

Simplified reporting

FMD reporting was simplified from the 2014–15 reporting period onwards for new, existing and consolidated accounts. The requirement to report some fields depends on whether or not your system collects and stores the data. To maximise the data available for your clients in pre-fill, all fields should be reported if the data is available.

If the full date for date fields, except Date of payment, is not available you may report the month and year and zero fill the day. For example November 2015 is reported as 00112015. This requirement aligns with the DA monthly reporting requirements. Due to ATO system constraints where a partial date is provided this will be converted to 01/MM/CCYY.



If you are unable to distinguish between types of credits (e.g. deposits and transfer ins) and debits (e.g. repayments and transfer outs), the credit should be reported in the Amount of deductible deposit field and the debit reported in the Amount of repayment field.

If more than eight debit transactions occur within the financial year for:

accounts held less than 12 months use all the repayment and transfer out fields before a second FMD account data record is required

consolidated accounts and accounts held longer than 12 months, report the first debit at the Amount of repayment (first) field and aggregate the remaining debit transactions and report at the Amount of repayment (second) field.

If the data is not available for the following fields, they may be blank or zero filled in accordance with their field format:

Account reference number (7.56) BSB number (7.57) Branch location (7.58) Transferor BSB number (7.127) Transferee BSB number (7.130)

Accounts held for less than 12 months

Reporting requirements for conditional FMD transaction fields (excluding interest) are:


7.120 Amount of deductible deposit

This field is used for reporting a new deposit within the financial year.

If reporters cannot distinguish between deposits and transfers in, the credit transaction can be reported in this field.

If multiple deposits or credits are made during the financial year each deposit must be reported on a separate FMD account data record.

7.121 Date of deductible deposit

The date the deductible deposit was made with the FMD provider. This field is required for new deposits held for less than 12 months.

This date enables tracking of each individual deposit and to determine whether a repayment has been made within 12 months of the deposit.




If the full date the deposit was made is not available report the month and year only.

7.122 Date of original deductible deposit

This date is optional for accounts held for less than 12 months.

The date the deductible deposit was made with the FMD provider. This date may be within or outside the current financial year and is determined by the original deposit date.


7.123 Amount of repayment Each repayment should be reported separately

If reporters cannot distinguish between repayments and transfers out, the debit transaction can be reported at this field.

7.124 Date of repayment The date each repayment was made.

If the full date of the repayment is not available report the month and year only.

7.125 Amount of transfer in This field is used for reporting a transfer in where reporters can distinguish between deposits and transfers in.

7.126 Date of transfer in This field is used to report a date when the amount of transfer in is reported.

If the full date of the transfer is not available report the month and year only.

7.131 TFN withholding tax deducted from repayments in the financial year

If an FMD owner has not provided a TFN for the FMD account TFN withholding tax must be deducted from repayments in the financial year and reported at this field.

Consolidated accounts and accounts held for more than 12 months

Reporting requirements for conditional/optional FMD transaction fields (excluding interest) are:


7.120 Amount of deductible deposit

This field is used to report the first deposit being consolidated. The second and subsequent deposits to be consolidated can be aggregated and reported as one amount at the Amount of transfer in field.

7.121 Date of deductible deposit

This field is not required for deposits more than 12 months old. Deposits less than 12 months old should not be consolidated.

7.122 Date of original deductible deposit

This field is required for deposits and transfers in more than 12 months old including consolidated accounts. This should be the original date of the latest FMD deposit or the end of




the financial year of the previous year.

For example, two deposits are to be consolidated. Date of deposit for the first deposit was 10/12/1010 and the date of deposit of the second deposit was 27/08/2011, report 27/08/2011 or 30/06/CCYY where CCYY = the previous financial year.


7.125 Amount of transfer in This field is used to report the additional deposits, after the first one, being consolidated. The additional deposits can be aggregated and reported here as one amount.

7.126 Date of transfer in This field is used to report a date when the amount of transfer in is reported. If an aggregated amount is reported at Amount of transfer in field this date should be 30 June of the last financial year.

If the full date of the transfer is not available report the month and year only.

7.123 Amount of Repayment Report the first debit transaction in the first Amount of repayment field and any others as an aggregated amount in the second Amount of repayment field.

If reporters cannot distinguish between repayments and transfers out, the debit transaction can be reported at this field.

7.124 Date of repayment (first) Report the date of the first debit transaction


7.124 Date of repayment (second)

If multiple debit transactions have been aggregated, report the date of the last transaction. For example: three repayments were made on 27/11/2015, 01/02/2016 and 09/03/2016 and are aggregated. The date reported is 09/03/2016.


7.131 TFN withholding tax deducted from repayments in the financial year

If an FMD owner has not provided a TFN for the FMD account TFN withholding tax must be deducted from repayments in the financial year and reported at this field.

An alternative to aggregating the repayment amounts is to report each repayment or debit transaction separately in the Amount of Repayment fields and Transfer Out fields.



REPORTING EXAMPLES

Example 12.1 – New FMD account with two repayments and interest paid

Ephraim Takacs opened an FMD account with a deposit of $200,000.00 on 21 August 2014. He made two cash repayments, $100,000.00 on 10 December 2015 and $50,000.00 on 3 March 2016.Interest of $3,500.00 was paid on 27 May 2016.

FARM MANAGEMENT DEPOSIT ACCOUNT DATA RECORD Reference number Field name Content

7.1 Record length (=850) 8507.115 Record identifier DFMDACCT7.116 Sequence number of DFMDACCT record 000000017.117 Sequence number of multiple DFMDACCT records 017.55 Investment reference number 85245698717.56 Account reference number FMD1237.57 BSB number 2728087.58 Branch location Blank fill7.59 Account name EPHRAIM TAKACS7.118 Personal identification number (PIN) 14377.119 ANZSIC code 01727.62 Date of payment (DDMMCCYY) 270520167.63 Type of investment 27.64 Type of payment FMD7.71 Interest (cents) 0000003500007.66 TFN withholding tax deducted (cents) 0000000000007.67 TFN withholding tax refunded (cents) 0000000000007.120 Amount of deductible deposit (cents) 0000200000007.121 Date of deductible deposit (DDMMCCYY) 210820147.122 *Date of original deductible deposit (DDMMCCYY) 210820147.123 Amount of repayment (first) (cents) 0000100000007.124 Date of repayment (first) (DDMMCCYY) 101220157.123 Amount of repayment (second) (cents) 0000050000007.124 Date of repayment (second) (DDMMCCYY) 030320167.123 Amount of repayment (third) (cents) 0000000000007.124 Date of repayment (third) (DDMMCCYY) 000000007.123 Amount of repayment (fourth) (cents) 0000000000007.124 Date of repayment (fourth) (DDMMCCYY) 000000007.125 Amount of transfer in (cents) 0000000000007.126 Date of transfer in (DDMMCCYY) 000000007.127 Transferor BSB number 0000007.128 Amount of transfer out (first) (cents) 0000000000007.129 Date of transfer out (first) (DDMMCCYY) 00000000




7.130 Transferee BSB number (first) 0000007.128 Amount of transfer out (second) (cents) 0000000000007.129 Date of transfer out (second) (DDMMCCYY) 000000007.130 Transferee BSB number (second) 0000007.128 Amount of transfer out (third) (cents) 0000000000007.129 Date of transfer out (third) (DDMMCCYY) 000000007.130 Transferee BSB number (third) 0000007.128 Amount of transfer out (fourth) (cents) 0000000000007.129 Date of transfer out (fourth) (DDMMCCYY) 000000007.130 Transferee BSB number (fourth) 000000

7.131 TFN withholding tax deducted from repayments in the financial year (cents) 000000000000

7.132 Amount of closing balance (cents) 0000050000007.133 Unclaimed moneys (cents) 0000000000007.11 Filler Blank fill* Date of original deductible deposit is optional for deposits held for less than 12 months. If your natural systems capture and report this information then continue to do so.

Alternatively, if your system cannot distinguish between repayments and transfer outs, the debit amounts can be reported first as repayments and then as transfers out.

Example 12.2 – Existing FMD account with a transfer out and interest paid

Sebastian Copperfield has an FMD account, with Northern Sun Bank, opened on 11 July 2008. He made a transfer out to Merlon Bank Ltd of $35,000.00 on 10 November 2015. Interest of $1,833.00 was paid on 8 January 2016. Closing balance as at 30 June 2016 is $50,000.00.

FARM MANAGEMENT DEPOSIT ACCOUNT DATA RECORD – Northern Sun Bank


7.1 Record length (=850) 8507.115 Record identifier DFMDACCT7.116 Sequence number of DFMDACCT record 000000017.117 Sequence number of multiple DFMDACCT records 017.55 Investment reference number 32658792568797.56 Account reference number FMD1047.57 BSB number 2728087.58 Branch location Blank fill7.59 Account name SEBASTIAN COPPERFIELD7.118 Personal identification number (PIN) 66117.119 ANZSIC code 01607.62 Date of payment (DDMMCCYY) 080120167.63 Type of investment 2




7.64 Type of payment FMD7.71 Interest (cents) 0000001833007.66 TFN withholding tax deducted (cents) 0000000000007.67 TFN withholding tax refunded (cents) 0000000000007.120 Amount of deductible deposit (cents) 0000000000007.121 Date of deductible deposit (DDMMCCYY) 000000007.122 Date of original deductible deposit (DDMMCCYY) 000000007.123 Amount of repayment (first) (cents) 0000000000007.124 Date of repayment (first) (DDMMCCYY) 000000007.123 Amount of repayment (second) (cents) 0000000000007.124 Date of repayment (second) (DDMMCCYY) 000000007.123 Amount of repayment (third) (cents) 0000000000007.124 Date of repayment (third) (DDMMCCYY) 000000007.123 Amount of repayment (fourth) (cents) 0000000000007.124 Date of repayment (fourth) (DDMMCCYY) 000000007.125 Amount of transfer in (cents) 0000000000007.126 Date of transfer in (DDMMCCYY) 000000007.127 Transferor BSB number 0000007.128 Amount of transfer out (first) (cents) 0000035000007.129 Date of transfer out (first) (DDMMCCYY) 101120157.130 Transferee BSB number (first) 5681927.128 Amount of transfer out (second) (cents) 0000000000007.129 Date of transfer out (second) (DDMMCCYY) 000000007.130 Transferee BSB number (second) 0000007.128 Amount of transfer out (third) (cents) 0000000000007.129 Date of transfer out (third) (DDMMCCYY) 000000007.130 Transferee BSB number (third) 0000007.128 Amount of transfer out (fourth) (cents) 0000000000007.129 Date of transfer out (fourth) (DDMMCCYY) 000000007.130 Transferee BSB number (fourth) 000000


7.132 Amount of closing balance (cents) 0000050000007.133 Unclaimed moneys (cents) 0000000000007.11 Filler Blank fillAlternatively, if your system cannot distinguish between repayments and transfer outs, the debit amounts can be reported first as repayments and then as transfers out.

FARM MANAGEMENT DEPOSIT ACCOUNT DATA RECORD – Merlon Bank Ltd


7.1 Record length (=850) 850




7.115 Record identifier DFMDACCT7.116 Sequence number of DFMDACCT record 000000017.117 Sequence number of multiple DFMDACCT records 017.55 Investment reference number 23814368745697.56 Account reference number FMD10257.57 BSB number 5681927.58 Branch location Blank fill7.59 Account name SEBASTIAN COPPERFIELD7.118 Personal identification number (PIN) 91257.119 ANZSIC code 01607.62 Date of payment (DDMMCCYY) 000000007.63 Type of investment Blank fill7.64 Type of payment Blank fill7.71 Interest (cents) 0000000000007.66 TFN withholding tax deducted (cents) 0000000000007.67 TFN withholding tax refunded (cents) 0000000000007.120 Amount of deductible deposit (cents) 0000000000007.121 Date of deductible deposit (DDMMCCYY) 000000007.122 Date of original deductible deposit (DDMMCCYY) 110720087.123 Amount of repayment (first) (cents) 0000000000007.124 Date of repayment (first) (DDMMCCYY) 000000007.123 Amount of repayment (second) (cents) 0000000000007.124 Date of repayment (second) (DDMMCCYY) 000000007.123 Amount of repayment (third) (cents) 0000000000007.124 Date of repayment (third) (DDMMCCYY) 000000007.123 Amount of repayment (fourth) (cents) 0000000000007.124 Date of repayment (fourth) (DDMMCCYY) 000000007.125 Amount of transfer in (cents) 0000035000007.126 Date of transfer in (DDMMCCYY) 101120157.127 Transferor BSB number 2728087.128 Amount of transfer out (first) (cents) 0000000000007.129 Date of transfer out (first) (DDMMCCYY) 000000007.130 Transferee BSB number (first) 0000007.128 Amount of transfer out (second) (cents) 0000000000007.129 Date of transfer out (second) (DDMMCCYY) 000000007.130 Transferee BSB number (second) 0000007.128 Amount of transfer out (third) (cents) 0000000000007.129 Date of transfer out (third) (DDMMCCYY) 000000007.130 Transferee BSB number (third) 0000007.128 Amount of transfer out (fourth) (cents) 0000000000007.129 Date of transfer out (fourth) (DDMMCCYY) 000000007.130 Transferee BSB number (fourth) 0000007.131 TFN withholding tax deducted from repayments in the financial 000000000000




year (cents)7.132 Amount of closing balance (cents) 0000035000007.133 Unclaimed moneys (cents) 0000000000007.11 Filler Blank fill

Alternatively, if your system cannot distinguish between transfers in and deposits the credit amount can be reported as a deposit.

Example 12.3 – Existing FMD account (more than 12 months old) with 12 debit transactions

Esther McManus has an FMD account opened on 17 September 2009. She makes a repayment of $1300 on the 25th of each calendar month. Interest of $2967.32 was paid on 31 December 2015.Closing balance as at 30 June 2016 is $157,000.

FARM MANAGEMENT DEPOSIT ACCOUNT DATA RECORD


7.1 Record length (=850) 8507.115 Record identifier DFMDACCT7.116 Sequence number of DFMDACCT record 000000017.117 Sequence number of multiple DFMDACCT records 017.55 Investment reference number 22255567487.56 Account reference number FMD0017.57 BSB number 2728087.58 Branch location Blank fill7.59 Account name ESTHER MCMANUS7.118 Personal identification number (PIN) 26347.119 ANZSIC code 01417.62 Date of payment (DDMMCCYY) 311220157.63 Type of investment 27.64 Type of payment FMD7.71 Interest (cents) 0000002967327.66 TFN withholding tax deducted (cents) 0000000000007.67 TFN withholding tax refunded (cents) 0000000000007.120 Amount of deductible deposit (cents) 0000000000007.121 Date of deductible deposit (DDMMCCYY) 000000007.122 Date of original deductible deposit (DDMMCCYY) 170920097.123 Amount of repayment (first) (cents) 0000001300007.124 Date of repayment (first) (DDMMCCYY) 250720157.123 Amount of repayment (second) (cents) 0000014300007.124 Date of repayment (second) (DDMMCCYY) 25062016




7.123 Amount of repayment (third) (cents) 0000000000007.124 Date of repayment (third) (DDMMCCYY) 000000007.123 Amount of repayment (fourth) (cents) 0000000000007.124 Date of repayment (fourth) (DDMMCCYY) 000000007.125 Amount of transfer in (cents) 0000000000007.126 Date of transfer in (DDMMCCYY) 000000007.127 Transferor BSB number 0000007.128 Amount of transfer out (first) (cents) 0000000000007.129 Date of transfer out (first) (DDMMCCYY) 000000007.130 Transferee BSB number (first) 0000007.128 Amount of transfer out (second) (cents) 0000000000007.129 Date of transfer out (second) (DDMMCCYY) 000000007.130 Transferee BSB number (second) 0000007.128 Amount of transfer out (third) (cents) 0000000000007.129 Date of transfer out (third) (DDMMCCYY) 000000007.130 Transferee BSB number (third) 0000007.128 Amount of transfer out (fourth) (cents) 0000000000007.129 Date of transfer out (fourth) (DDMMCCYY) 000000007.130 Transferee BSB number (fourth) 000000


7.132 Amount of closing balance (cents) 00157000007.133 Unclaimed moneys (cents) 0000000000007.11 Filler Blank fill

Alternatively the repayments can be reported by reporting each transaction separately in the four Amount of repayment fields and the four Amount of transfer in fields in the first FMD account data record and in the four Amount of repayment fields in a second FMD account data record. Reporting separately is a requirement if the account is less than 12 months old.

Example 12.4 – Consolidation of three existing accounts into an existing account

Isobelle Ashingly has three FMD accounts with the same provider and consolidates them into her existing account (account 1) on the 01/07/2015.

Account 1 balance = $20,000 Date of original deductible deposit 10/12/2010 Account 2 balance = $15,000 Date of original deductible deposit 27/08/2011 Account 3 balance = $80,000 Date of original deductible deposit 09/09/2012

She made three cash repayments, $21,000.00 on 3 August 2015, $9,000 on 18 December 2015 and $15,000.00 on 18 June 2016.Interest of $261.78 was paid on 31 December 2015.Closing balance as at 30 June 2016 is $$70,000.



The amount being consolidated from each account may not be the amount of the original deposit due to repayments or transfer outs however the date the original deposit was made is required.

FARM MANAGEMENT DEPOSIT ACCOUNT DATA RECORD 1


7.1 Record length (=850) 8507.115 Record identifier DFMDACCT7.116 Sequence number of DFMDACCT record 000000017.117 Sequence number of multiple DFMDACCT records 017.55 Investment reference number 221331568797.56 Account reference number FMD4277.57 BSB number 2728087.58 Branch location Blank fill7.59 Account name ISOBELLE ASHINGLY7.118 Personal identification number (PIN) 28027.119 ANZSIC code 01607.62 Date of payment (DDMMCCYY) 311220157.63 Type of investment 27.64 Type of payment FMD7.71 Interest (cents) 0000000261787.66 TFN withholding tax deducted (cents) 0000000000007.67 TFN withholding tax refunded (cents) 0000000000007.120 Amount of deductible deposit (cents) 0000015000007.121 *Date of deductible deposit (DDMMCCYY) 000000007.122 Date of original deductible deposit (DDMMCCYY) 101220107.123 Amount of repayment (first) (cents) 0000021000007.124 Date of repayment (first) (DDMMCCYY) 030820157.123 Amount of repayment (second) (cents) 0000024000007.124 Date of repayment (second) (DDMMCCYY) 180620167.123 Amount of repayment (third) (cents) 0000000000007.124 Date of repayment (third) (DDMMCCYY) 000000007.123 Amount of repayment (fourth) (cents) 0000000000007.124 Date of repayment (fourth) (DDMMCCYY) 000000007.125 Amount of transfer in (cents) 0000080000007.126 Date of transfer in (DDMMCCYY) 090920127.127 Transferor BSB number 2728087.128 Amount of transfer out (first) (cents) 0000000000007.129 Date of transfer out (first) (DDMMCCYY) 000000007.130 Transferee BSB number (first) 0000007.128 Amount of transfer out (second) (cents) 0000000000007.129 Date of transfer out (second) (DDMMCCYY) 000000007.130 Transferee BSB number (second) 000000




7.128 Amount of transfer out (third) (cents) 0000000000007.129 Date of transfer out (third) (DDMMCCYY) 000000007.130 Transferee BSB number (third) 0000007.128 Amount of transfer out (fourth) (cents) 0000000000007.129 Date of transfer out (fourth) (DDMMCCYY) 000000007.130 Transferee BSB number (fourth) 000000



* Date of deductible deposit is optional for this transaction as the deposit has been held for more than 12 months. If your natural systems capture and reports this information then continue to do so.

As this is a consolidated account the credit and debit transactions are aggregated. The closing balance of the first deposit (account 1) is reported at the Amount of deductible deposit field and the remaining two deposits (accounts 2 and 3) are aggregated and reported as one amount at the Amount of transfer in field. It is not critical which deposit is reported at the Amount of deductible deposit field.

FARM MANAGEMENT DEPOSIT ACCOUNT DATA RECORD 2


7.1 Record length (=850) 8507.115 Record identifier DFMDACCT7.116 Sequence number of DFMDACCT record 000000027.117 Sequence number of multiple DFMDACCT records 017.55 Investment reference number 2233445677.56 Account reference number FMD1167.57 BSB number 2728087.58 Branch location Blank fill7.59 Account name ISOBELLE ASHINGLY7.118 Personal identification number (PIN) 10357.119 ANZSIC code 01607.62 Date of payment (DDMMCCYY) 000000007.63 Type of investment 27.64 Type of payment FMD7.71 Interest (cents) 0000000000007.66 TFN withholding tax deducted (cents) 0000000000007.67 TFN withholding tax refunded (cents) 0000000000007.120 Amount of deductible deposit (cents) 0000000000007.121 *Date of deductible deposit (DDMMCCYY) 000000007.122 Date of original deductible deposit (DDMMCCYY) 00000000




7.123 Amount of repayment (first) (cents) 0000000000007.124 Date of repayment (first) (DDMMCCYY) 000000007.123 Amount of repayment (second) (cents) 0000000000007.124 Date of repayment (second) (DDMMCCYY) 000000007.123 Amount of repayment (third) (cents) 0000000000007.124 Date of repayment (third) (DDMMCCYY) 000000007.123 Amount of repayment (fourth) (cents) 0000000000007.124 Date of repayment (fourth) (DDMMCCYY) 000000007.125 Amount of transfer in (cents) 0000000000007.126 Date of transfer in (DDMMCCYY) 000000007.127 Transferor BSB number 0000007.128 Amount of transfer out (first) (cents) 0000015000007.129 Date of transfer out (first) (DDMMCCYY) 010720157.130 Transferee BSB number (first) 2728087.128 Amount of transfer out (second) (cents) 0000000000007.129 Date of transfer out (second) (DDMMCCYY) 000000007.130 Transferee BSB number (second) 0000007.128 Amount of transfer out (third) (cents) 0000000000007.129 Date of transfer out (third) (DDMMCCYY) 000000007.130 Transferee BSB number (third) 0000007.128 Amount of transfer out (fourth) (cents) 0000000000007.129 Date of transfer out (fourth) (DDMMCCYY) 000000007.130 Transferee BSB number (fourth) 000000



An FMD account data record, similar to Record 2 above, would be provided for account 3.

An Investor data record is required after each Farm management deposit account data record.



13 AMENDMENTS PROCESSINGSuppliers should report amendments when incorrect records have been found following the lodgment of an original or previously supplied AIIR.

There are two ways to report amended information:

Replacement AIIR – a new AIIR that completely replaces the previously supplied AIIR and includes the amended investment information as well as the previously supplied correct investment information.

Corrected AIIR – this AIIR contains only those records that were in the original or previously supplied AIIR that required amending.

To ensure a replacement AIIR is correctly linked to the original or previously supplied AIIR the following fields must be supplied:

Field names Replacement or Corrected AIIRSupplier file reference (7.17) - a unique supplier file reference must be provided for each AIIR sent to the ATO by the same supplier for the same financial year. This is to enable the ATO to identify the report when contacting the supplier and to enable a replacement file or a file containing corrected records to be correctly linked to the original file.

Supplier file reference of the current file

Supplier file reference of file being replaced or containing records to be corrected (7.18) –– when sending a replacement file or a file containing corrected records, the Supplier file reference of the original file must be provided in this field. This is to enable a replacement file or a file containing corrected records to be correctly linked to the original file.

Supplier file reference of the previously supplied file

Sequence number of IDENTITY record (7.32) Sequence number of the previously supplied fileSequence number of DACCOUNT record (7.54) Sequence number of the previously supplied fileSequence number of DACCSUPP record (7.104) Sequence number of the previously supplied fileSequence number of DFMDACCT record (7.116) Sequence number of the previously supplied fileSequence number of DINVESTOR record (7.135) Sequence number of the previously supplied file

REPLACEMENT AIIR

When errors have been identified in the investor or investment account information, a replacement AIIR, with the errors corrected, should be submitted rather than a corrected AIIR. This will ensure that all data previously provided is replaced with the correct information. A replacement AIIR can contain more or less account or investor records than the AIIR it replaces because when a replacement AIIR is received, the AIIR being replaced will be rejected and the replacement AIIR will be treated as the current report.



Example 13.1 – Replacing an AIIR

Fast Track Credit Union lodged an AIIR on 15 July 2016.

One of the investment accounts, in that AIIR, was reported as having two investors, however upon review the account was held by only one investor. This resulted in two taxpayers having a share of the interest earned pre-filling to their income tax return, whereas the total interest belonged to only one of the taxpayers.

Fast Track Credit Union supplies a replacement AIIR omitting the incorrectly reported Investor data record. The replacement AIIR also contains all the unchanged records previously reported.

A replacement file is the only method in which the incorrectly reported investor is removed from the account and the total interest is attributed to the one account owner. The replacement file updates the previously pre-filled interest amounts for each taxpayer and avoids unnecessary compliance activity being undertaken because of mismatched income.

AIIR CONTAINING CORRECTED RECORDS

If adjustments to the investment income amounts of more than ± $20.00 for an individual investor or ± $100.00 for a non-individual investor , after the AIIR has been submitted, corrected Investment account data records and all associated Investor data records must be provided.

When supplying corrected records, it is important that:

The corrected Investment account data record and all of the Investor data records associated with the account data record must be provided.

Only records that have been previously supplied can be corrected. The amount reported should not be the difference between the amount previously

reported and the correct amount. It should be the correct amount for the account for the year or for the date of payment.

A replacement file must be provided if records are to be added to or removed from an AIIR.

Example 13.2 – Correcting a previously lodged AIIR

In August 2016, Endurance Bank identified they had reported the incorrect amount of interest paid for 567 accounts in the 2015-16 financial year. This results in an adjustment to the interest amount paid to these investors reported in the 2016 AIIR lodged on 15 July 2016.

On 24 August 2016, the following information was provided:




7.7 Type of report C C=Corrected

7.17 Supplier file reference 4578367876 This is the Supplier file reference for the current file.

7.18Supplier file reference of file being replaced or containing records being corrected

6787638754

This field contains the information supplied at the Supplier file reference of file being replaced or containing records being corrected field of the original file.

7.32 Sequence number of IDENTITY record 01

This is the sequence number of the Investment body identity data record in the current file.

7.54 Sequence number of DACCOUNT record 00002468

This field contains the Sequence number of DACCOUNT record reported in the original file.

There were 5,296 Investment account data records reported in the original file and the sequence number of this DACCOUNT record in the original file was 2,468. This number will be unique for each of the 567 corrected DACCOUNT records and reported exactly as reported in the original supplied file.

7.135 Sequence number of DINVESTOR record 01

This field contains the Sequence number of DINVESTOR record reported exactly as reported in the original supplied file.

Example 13.3 - Incorrect amount of interest for individual investor

On 1 September 2016, Peter receives a letter from his bank advising the interest amount of $330.00 reported on his statement should have been $230.00.

The bank will send one corrected Investment account data record showing the correct amount of Interest (7.71) of $230.00 and one Investor data record.

Example 13.4 - Incorrect amount of interest for joint account

On 22 August 2016, Henri and Hilary receive a letter from their credit union advising the interest amount of $1,739.00 reported on their statement should have been $1,263.00.

The bank will send one corrected Investment account data record showing the correct amount of Interest (7.71) of $1,263.00, one Investor data record for Henri and one Investor data record for Hilary.

Example 13.5 - Incorrect amount of interest for non-individual investor

On 31 August 2016, Primary Printing Ltd receive a letter from their bank advising the interest amount of $3,712.00 reported on their statement should have been $3,612.00.



The bank will send one corrected Investment account data record showing the correct amount of Interest (7.71) of $3,612.00 and one Investor data record.

LODGING BY PAPER

Small investment bodies with less than 20 investments that do not report farm management deposit accounts can lodge a replacement or corrected AIIR using the Instructions and paper form for Annual investment income report (NAT 74794). This form can be downloaded from ato.gov.au


https://www.ato.gov.au/business/yearly-reports-and-returns/in-detail/investment-income-reporting/instructions-and-paper-form-for-annual-investment-income-report/


14 CORRECTED TFN AND ABN RETURN FILESIf an investment body supplies an invalid investor TFN or ABN in an AIIR, we will attempt to match the investor to a client on the ATO client register. If the reported TFN contains seven, eight or nine digits and is a slightly corrupted rendition of the investor’s TFN and the correct TFN can be determined, we will return the original TFN and the corrected TFN to the investment body. If the correct investor TFN cannot be found, the corrected TFN returned will contain zeros.

If the investor supplies a valid ABN, the original ABN and corrected ABNs returned will be the same. If the investor supplies an invalid ABN, the corrected ABN returned will contain zeros.

When this situation occurs the investor is deemed not to have quoted.

UPDATING OF TFN OR ABN FIELDS BY INVESTMENT BODIES

When investment bodies receive the corrected TFN and/or ABN information from us, they are required to update the TFN and/or ABN fields in the corresponding investor records in their database. The original TFN and/or ABN for the investor, the Investment reference number (7.55), Customer reference number (7.136) and investor name fields (7.141, 7.142, 7.143 and 7.146) fields provided by the investment body in the original AIIR should be used to ensure that the appropriate investor record is being updated.

Once the investment body has made sure it has matched to the correct investor record in their database, then the TFN and/or ABN for that investor should be replaced by the number in the corrected investor TFN or corrected investor ABN fields.

The exception to this rule is if an investor has requoted their TFN and/or ABN to the investment body before receiving the corrected TFN and/or ABN information from us. When this occurs, the TFN and/or ABN will not match the original investor TFN and/or original investor ABN contained in this file. The details of the investor and the new requoted TFN and/or ABN should be included in the next Quarterly tax file number and Australian business number report sent to us.

INVESTORS DEEMED NOT TO HAVE QUOTED A TFN OR ABN

If the investor is ‘deemed not to have quoted’, the investment body is required to withhold from future payments of investment income subject to withholding arrangements, tax at the highest marginal rate plus the Medicare levy, until the investor either quotes a new TFN and/or ABN in connection with the investment, or claims an exemption from quoting.

NON-RESIDENT TAX IDENTIFICATION NUMBERS (TINS)

We do not send corrected TINS.



15 FREQUENTLY ASKED QUESTIONSIf your question is not answered in this section refer to ato.gov.au or contact us on 1800 072 681.

GENERAL

Does a cooperative company need to report an AIIR?Yes. A cooperative company is a public company and, therefore, the same rules as any other type of public company apply.

Does an Australian Stock Exchange - listed foreign company with Australian investments need to lodge an AIIR? The company is deducting foreign tax from the Australian shareholders.Yes. The ASX-listed foreign company is required to lodge an AIIR as it is dealing with Australian investments. Australian resident investors are assessed on their FSI even when tax has been withheld from that income. If tax has been withheld and paid to a foreign tax jurisdiction, Australian resident investors may be entitled to a foreign income tax offset.

What is not reported in the AIIR?Do not report:

interest related to consumer finance such as interest paid by a company to a bank on a business loan from the bank

Which item number for the 'Type of investment' field do I use for a private company?A private company should report item 3 as the Type of investment (7.63). A loan of money to a body corporate is an investment covered by the TFN rules. This kind of investment is covered in Item 3 in the table at subsection 202D (1) of the ITAA 1936.

The most usual way for an entity to be incorporated is by registering as a company with the Australian Securities & Investment Commission (ASIC) under the Corporations Act 2001. Registration of the company with ASIC can be as a:

proprietary company (also commonly called a private company) a public company, that may or may not be listed on the ASX (it is an unlisted company if

not listed).

It is often the case that small private companies have a relatively small number of investors. Loans made to these companies (other than those related to consumer finance) are still an investment covered by the TFN rules.

If there were less than 10 investments in the company during the year, and no withholding from any investments, the company does not need to lodge an AIIR but may need to lodge a Dividend and interest schedule (NAT 8030) that forms part of the company tax return.




What Date of payment (7.62) should be recorded when reporting reinvested dividends? If a dividend is reinvested, the income is taken to have been paid on the date of reinvestment.

WITHHOLDING TAX

When is withholding required to be withheld from investment income payments?Withholding is required to be held from investment income for which the investor:

has not quoted a TFN or an ABN before the payment became payable, and has not informed the investment body that he or she is exempt from quoting. The amount to be withheld from income is the highest marginal rate of tax plus the Medicare levy. The rate applies to all investors, including non-individual investors. Refer to ato.gov.au for current withholding rates.

If a managed fund does not quote their TFN or ABN when investing on behalf of their investors, how is the withholding amount reported?The receiving investment body will withhold tax at the top marginal rate plus Medicare levy from the investment earnings. The managed fund is able to pass on the credit amount withheld to their investors.

For example, Managed Fund A does not quote their ABN on a term deposit investment opened with Outback Bank. Income earned from the term deposit equals $10,000 and amount withheld equals $4,800. This income is part of unit trust distributions to 10 unit holders, each unit holder owning one unit.Outback Bank’s AIIR will include the following income for Managed Fund A:


7.66 TFN withholding tax deducted (cents) 000000480000 $4,8007.71 Interest 000001000000 $10,000

In Managed Fund A’s AIIR they will report the interest and withholding for each unit holder in their AIIR as follows:


7.66 TFN withholding tax deducted (cents) 000000480000 $4807.71 Interest 000001000000 $1,000

7.77 Non-primary production income 000000001000

$1,000plus the other components of

the Non-primary production income calculation

The unit holders are not disadvantaged as they are able to claim the credit at label 13R Share of credit for tax file number amounts withheld from interest, dividends and unit trust distributions in their income tax return.




When is an amount reported at the Share of credit for amounts withheld from foreign resident withholding (7.94) field?An amount is reported at the Share of credit for amounts withheld from foreign resident withholding (7.94) field when an amount of tax is withheld and paid to us from trust distributions because of the operation of foreign resident withholding for particular types of activities listed in regulations to the TAA 1953. These activities are:

promoting or organising casino gaming junket arrangements entertainment and sports activities under contracts for the construction, installation and upgrading of buildings, plant and

fixtures and for associated activities.

For further information about foreign resident withholding refer to Foreign Resident Withholding (FRW) - who it affects on ato.gov.au

Is the accrued interest on qualifying securities subject to non-resident withholding tax or any other withholding tax?

The interest accrued on a qualifying security is both not subject to non-resident interest withholding tax and not included in the non-resident’s assessable income. It is the interest paid or payable on a qualifying security that is subject to non-resident interest withholding tax. No other withholding tax is applicable. Refer to ato.gov.au for further information on Non-resident withholding of interest.

If a joint account has multiple account holders that one account holder is a resident for tax purposes but has not quoted their TFN, another account holder is a non-resident and another account holder is a resident which withholding applies and to whom?

TFN/ABN withholding applies to the whole of the account until their TFN/ABN obligation is satisfied then the non-resident withholding applies to the whole of the account.

INCOME

What is a primary production business?Primary production business is defined in subsection 995-1(1) of the ITAA 1997.

You carry on a primary production business if you carry on a business of:

cultivating or propagating plants, fungi or their products or parts (including seeds, spores, bulbs and similar things), in any physical environment

maintaining animals for the purpose of selling them or their bodily produce (including natural increase)

manufacturing dairy produce from raw material that you produced



https://www.ato.gov.au/business/international-tax-for-business/in-detail/australian-income-of-foreign-residents/foreign-resident-withholding-(frw)---who-it-affects/


conducting operations relating directly to taking or catching fish, turtles, dugong, bêche-de-mer, crustacés or aquatic molluscs

conducting operations relating directly to taking or culturing pearls or pearl shell planting or tending trees in a plantation or forest that are intended to be felled felling trees in a plantation or forest transporting trees, or parts of trees, that you felled in a plantation or forest to the place

where they are first to be milled or processed.

Income derived from primary producing activities is reported at the Primary production income (7.106) field. What is a fund payment?A fund payment is a component of a payment made by the trustee of a managed investment trust that, in effect, represents a distribution of the net income of the trust. From the actual payment made by a trustee, the following exclusions apply:

dividend, interest or royalty income (as defined in Division 11A of the ITAA 1936 subject to (or exempted from)) a requirement to withhold under Subdivision 12-F of Schedule 1 of the TAA 1953

capital gains and losses from a CGT asset that is not taxable Australian property amounts that are not from an Australian source deductions relating to any of the above amounts.

A payment is a fund payment in relation to an income year only if it is made:

during the income year within three months after the income year within a longer period if agreed to by the Commissioner but not exceeding six months

from the end of the income year.

Do I report dividends based on their ex date or their payment date?The date of payment is the date that the income was derived by the client.

For example, if a dividend goes ex in June 2016 and payment occurs in July 2016, the dividend is included in the 2016-17 financial year.

UNIT TRUST DISTRIBUTIONS

If a trust distribution has no income to distribute in the Supplementary account data record do I still need to supply a supplementary?Yes, all records lodged with Type of payment (7.64) field as UTD must include a Supplementary account data record.



FOREIGN SOURCE INCOME

What is Assessable foreign source income (7.86)?This is the gross amount of assessable income derived from foreign sources. This income includes the amounts reported at Other net foreign source income (7.87), Foreign income tax offset (7.88) and Net foreign rent (7.112) which comprise of:

income received from foreign employment that was not shown on a PAYG payment summary such as foreign employment

foreign pension or annuity, without an undeducted purchase price foreign pension or annuity with an undeducted purchase price foreign rental income other foreign source income and this includes foreign tax withheld.

It excludes income subject to capital gains tax, less deductible expenses.

What is Other net foreign source income (7.87)?This is the sum of all other assessable foreign income that has not been included at the Assessable foreign source income (7.86) field. This amount:

includes foreign tax withheld on that income excludes income subject to CGT is less deductible expenses.

What non-resident income is not reported on the AIIR?Non-resident income other than investment income (for example, royalties) should be reported in the PAYG withholding from interest, dividends and royalties paid to non-residents - annual report (NAT 7187).

Where do I report foreign tax credits that are associated with Assessable foreign source income (7.86)? A foreign tax credit is the amount of tax paid on foreign source income to overseas tax authorities and is reported at the Foreign income tax offset (7.88) field.

These credits can be paid as a result of a trust distribution or directly – that is not part of a trust distribution. When reported through a trust distribution, the Type of payment (7.64) field = UTD. When paid directly, the Type of payment field = FSI.

CHANGES TO INVESTOR DETAILS

Can the TFN exemption code 333333333 be used on the AIIR if the child has turned 16 in the financial year being reported?

Yes, providing the following applies:



If the investor was under 16 years of age on 1 January preceding the payment and the investment income for the financial year was under the tax free threshold for minors

and the investor did not provide a TFN

CORRECTING OR AMENDING AN AIIR

What do I do if I have made an error in the AIIR or need to make an adjustment to the already lodged report?There are two options for reporting amended AIIR data – send a:

replacement AIIR corrected AIIR.

See Section 13, Reporting Amendments, for more information.



APPENDICES

APPENDIX A - ERS/PC SPREADSHEET FIELD NAME REFERENCE COMPARISON

The following table lists the AIIR field name and corresponding reference number for AIIR v10 and PC Spreadsheet v4

AIIR field nameThere are some minor differences in the field names between v10 and v4and these are identified using( ) in the list below

AIIR version

ERSv10

PC spreadsheet

v4Record length 7.1 naRecord identifier 7.2 naSupplier Australian business number 7.3 naRun type 7.4 naFinancial year end date 7.5 naData type 7.6 naType of report 7.7 7.22Type of return media 7.8 naATO reporting specification version number 7.9 naFile format validation method 7.10 naFiller 7.11 naRecord identifier 7.12 naSupplier name 7.13 naSupplier contact name 7.14 naSupplier contact telephone number 7.15 naSupplier facsimile number 7.16 naSupplier file reference 7.17 7.25Supplier file reference of file being replaced or containing records to be corrected 7.18 7.26

Record identifier 7.19 naSupplier street address - line 1 7.20 naSupplier street address - line 2 7.20 naSupplier suburb, town or locality 7.21 naSupplier state or territory 7.22 naSupplier postcode 7.23 naSupplier country 7.24 naSupplier postal address - line 1(Investment body postal address line 1) 7.25 7.10

Supplier postal address - line 2(Investment body postal address line 2) 7.25 7.10

Supplier suburb, town or locality (Postal suburb, town or locality) 7.26 7.11Supplier state or territory (Postal state or territory) 7.27 7.12Supplier postcode (Postal postcode) 7.28 7.13Supplier country (Postal country) 7.29 7.14Supplier email address 7.30 na




AIIR version

ERSv10

PC spreadsheet

v4Record identifier 7.31 naSequence number of IDENTITY record(Sequence number of the investment body identity record) 7.32 7.24

Financial year 7.33 7.19Investment body Australian business number (ABN) or withholding payer number (WPN) 7.34 7.1

Investment body branch number 7.35 7.2Investment body registered name 7.36 7.3Investment body trading name 7.37 7.4Investment body address line 1 7.38 7.5Investment body address line 2 7.38 7.5Suburb, town or locality 7.39 7.6State or territory 7.40 7.7Postcode 7.41 7.8Country 7.42 7.9Investment body contact name 7.43 7.15Investment body contact telephone number 7.44 7.16Investment body contact facsimile number 7.45 7.17Investment body contact email address 7.46 7.18Reporting period indicator 7.47 7.20SAP year end date 7.48 7.21Future reporting obligation 7.49 7.23Report format indicator 7.50 naRecord identifier 7.51 naSoftware product type 7.52 naRecord identifier 7.53 naSequence number of DACCOUNT record(Sequence number of the account record within the AIIR) 7.54 7.27

Investment reference number 7.55 7.53Account reference number 7.56 7.55BSB number 7.57 7.56Branch location 7.58 naAccount name 7.59 7.57Number of investors in the account 7.60 7.58Number of investor records provided 7.61 7.59Date of payment 7.62 7.60Type of investment 7.63 7.61Type of payment 7.64 7.62Term of investment 7.65 7.63TFN withholding tax deducted 7.66 7.64TFN withholding tax refunded 7.67 7.65Non-resident withholding amount deducted 7.68 7.66Non-resident withholding amount refunded 7.69 7.67




AIIR version

ERSv10

PC spreadsheet

v4Cash or non-cash value of an investment related betting chance prize 7.70 7.68Interest 7.71 7.69Unfranked dividends not declared to be conduit foreign income 7.72 7.70Unfranked dividends declared to be conduit foreign income 7.73 7.71Franked dividends 7.74 7.72Franking credit 7.75 7.73Other taxable Australian income 7.76 7.74Non-primary production income 7.77 7.75Other deductions relating to distributions 7.78 7.76Capital gains discounted method 7.79 7.77Capital gains indexation method 7.80 7.78Capital gains other method 7.81 7.79CGT concession amount 7.82 7.80Net capital gain 7.83 7.81Total current year capital gains 7.84 7.82Taxable foreign capital gains 7.85 7.83Assessable foreign source income 7.86 7.84Other net foreign source income 7.87 7.85Foreign income tax offset 7.88 7.86Australian franking credits from a New Zealand franking company 7.89 7.87Tax-exempted amounts 7.90 7.88Tax-free amounts 7.91 7.89Tax-deferred amounts 7.92 7.90Other allowable trust deductions 7.93 7.91Share of credit for amounts withheld from foreign resident withholding 7.94 7.92Share of credit for tax paid by trustee 7.95 7.93Non-resident beneficiary ss98(3) assessable amount 7.96 7.94Non-resident beneficiary ss98(4) assessable amount 7.97 7.95Interposed entity name 7.98 7.96Interposed entity TFN or ABN 7.99 7.97Managed investment trust fund payments 7.100 7.98Amounts withheld from managed investment trust fund payments 7.101 7.99Record identifier 7.102 naSupplementary income payment type 7.103 naSequence number of DACCSUPP record 7.104 naShare of National rental affordability scheme tax offset 7.105 7.100Primary production income 7.106 7.101Share of credit for tax withheld where ABN not quoted 7.107 7.102Deductions relating to distribution of primary production income 7.108 7.103Deductions relating to distribution of non-primary production income 7.109 7.104Transferor trust income 7.110 7.105CFC Income 7.111 7.106




AIIR version

ERSv10

PC spreadsheet

v4Net foreign rent 7.112 7.107Unfranked distributions from trusts 7.113 7.108Franked distributions from trusts 7.114 7.109Record identifier 7.115 naSequence number of DFMDACCT record 7.116 naSequence number of multiple DFMDACCT records 7.117 naPersonal identification number 7.118 naANSZIC code 7.119 naAmount of deductible deposit 7.120 naDate of deductible deposit 7.121 naDate of original deductible deposit 7.122 naAmount of repayment 7.123 naDate of repayment 7.124 naAmount of transfer in 7.125 naDate of transfer in 7.126 naTransferor BSB number 7.127 naAmount of transfer out 7.128 naDate of transfer out 7.129 naTransferee BSB number 7.130 naTFN withholding tax deducted from repayments in the financial year 7.131 naAmount of closing balance 7.132 naUnclaimed moneys 7.133 naRecord identifier 7.134 naSequence number of DINVESTOR record 7.135 7.28Customer reference number 7.136 7.54Investor entity type 7.137 7.29Investor tax file number 7.138 7.30Investor Australian business number 7.139 7.31Non-resident investor tax identification number 7.140 7.32Individual investor surname 7.141 7.33Individual investor first given name 7.142 7.34Individual investor second given name 7.143 7.35Individual investor date of birth 7.144 7.36Sex 7.145 7.37Non-individual investor name 7.146 7.38Australian address – line 1 7.147 7.39Australian address – line 2 7.147 7.39Australian suburb, town or locality 7.148 7.40Australian state or territory 7.149 7.41Australian postcode 7.150 7.42Date of change of residency status from resident to non-resident 7.151 7.44Overseas address – line 1 7.152 7.45




AIIR version

ERSv10

PC spreadsheet

v4Overseas address – line 2 7.152 7.45Overseas suburb, town or locality 7.153 7.46Overseas state or province 7.154 7.47Overseas postal code 7.155 7.48Overseas country 7.156 7.49Non-resident investor overseas country code 7.157 7.50Non-resident investor country of residence for tax purposes 7.158 7.52Date of change of residency status from non-resident to resident 7.159 7.51Investor daytime contact telephone number 7.160 7.43Record identifier 7.161 naNumber of records 7.162 naCount of IDENTITY records in the file 7.163 naCount of DACCOUNT records in the file 7.164 naCount of DACCSUPP records in the file 7.165 naCount of DFMDACCT records in the file 7.166 naCount of DINVESTOR records in the file 7.167 na



APPENDIX B – AIIR/ITR/SDS COMPARISON

Pre-fill, in the following table, refers to the ITR and portals and is subject to certain conditions. This table does not show all the information that is pre-filled, only those relating to the AIIR. Display only refers to the Tax Agent Portal. For more information on pre-filling go to ato.gov.au

AIIR v10 2016 2016 ITR Pre-fill 2016 SDS

Ref No Field name Payment

type Label Item name Label Display only Part Item name

7.55Investment reference number

Not applicable Not reported Not reported

7.56Account reference number

Not applicable Not reported x Not reported

7.57 BSB number


7.58 Branch location


7.59 Account name


7.60Number of investors in the account


7.61

Number of investor records provided


7.62 Date of payment


7.63 Type of investment


7.64 Type of payment All Not reported x Not reported

7.65 Term of investment


7.66

TFN withholding tax deducted (7.66 minus 7.67)

INT, DIS, TDP, FMD

10MTFN amounts withheld from gross interest

Not reported

DIV 11VTFN amounts withheld from dividends

Not reported

UTD 13R

Share of credit for TFN amounts withheld from interest, dividends and unit trust distributions

A


C TFN amounts withheld







7.67TFN withholding tax refunded

INT, DIS, TDP,FMD, DIV, UTD

13R


C TFN amounts withheld

7.68

Non-resident withholding amount deducted

INT, DIV, UTD 13A

Share of credit for amounts withheld from foreign resident withholding

x A


7.69

Non-resident withholding amount refunded

UTD Not reported x Not reported

7.70

Cash or non-cash value of an investment related betting chance prize

IRB 24Y Other income - category one x Not reported

7.71 Interest

DIS, INT, TDP, FMD

10L Gross interest Not reported

UTD 13U

Not directly reported (included in 7.77 and reported at 13U)

x C Interest

7.72

Unfranked dividends not declared to be conduit foreign income

DIV 11S Unfranked amount

Not reported

UTD 13U

Not directly reported (included in 7.113 or 7.114 and reported at 13U or 13C respectively)

x

A Share of non-primary production income

C Dividends: unfranked amount

7.73 Unfranked dividends declared to be conduit foreign

DIV 11S Unfranked amount

Not reported

UTD Not directly reported (may be Included in

x A Included in share of non-primary production income






income

7.113 and reported at 13U)

C Dividends: unfranked amount

7.74 Franked dividends

DIV 11T Franked amount

Not reported

UTD

Not directly reported (included in 7.114 and reported at 13C)

xA

Included in share of non-primary production income OR included in Franked distributions from trusts

C Dividends: franked amount

7.75 Franking credit

DIV 11U Franking credit

Not reported

UTD

13CFranked distributions from trusts

x A

Share of non-primary production incomeOR included in Franked distributions from trusts

13Q

Share of franking credit from franked dividends

C Franking credits

7.76Other taxable Australian income

UTD


x AIncluded in Share of non-primary production income

x C Other income

7.77

Non-primary production income (includes fields 7.71, 7.113, 7.76 and 7.93)

UTD 13U

Share of net income from trusts less capital gains, foreign income and franked distributions

AIncluded in Share of non-primary production income

C Other income

7.78

Other deductions relating to distributions UTD 13Y

Other deductions relating to amounts shown at O, U and C

A

Other deductions relating to non-primary production distributions

7.79

Capital gains discounted method

UTD 18 Capital gains

x A

Included in Total current year capital gains and Net capital gain

x B Capital gains: discounted method

x C Discounted capital gain






7.80

Capital gains indexation method


x x A


x x B Capital gains: discounted method

x x C Discounted capital gain

7.81Capital gains other method


x A


x B Capital gains: other method

x C Capital gains: other method

7.82CGT concession amount

UTD

Depends on individual circumstances of beneficiary

x x B CGT concession amount

x x C CGT Concession amount

7.83 Net capital gain UTD 18A Net capital

gain A Net capital gains C Net capital gains

7.84Total current year capital gains

UTD 18HTotal current year capital gains

A Total current year capital gains

B Total current year capital gains

7.85Taxable foreign capital gains

UTD 18 Capital gains x Not reported

7.86

Assessable foreign source income

FSI20E

Assessable foreign source income

x Not reported

UTD A Assessable foreign source income

7.87

Other net foreign source income

FSI20M

Other net foreign source income

x Not reported

UTD A Other net foreign source income

7.88Foreign income tax offset

FSI

20OForeign income tax offset

x Not reported

UTD A Foreign income tax

offsetC Foreign income

7.89

Australian franking credits from a New Zealand franking company

FSI

20F


x Not reported

UTD A


7.90Tax-exempted amounts

UTD x C Tax-exempted amounts






7.91 Tax-free amounts UTD

Depends on individual circumstances of beneficiary.

x C Tax-free amounts

7.92Tax-deferred amounts

UTD

Depends on individual circumstances of beneficiary

x

B Tax-deferred amounts

C Tax-deferred amounts

7.93

Other allowable trust deductions

UTD


x AIncluded in Share of non-primary production income

7.94


UTD 13A

Share of credit for amounts withheld from Foreign resident withholding

A

Share of credit for amounts withheld from Foreign resident withholding

7.95

Share of credit for tax paid by trustee

UTD 13S

Share of credit for tax paid by trustee

A Share of credit for tax paid by trustee

7.96

Non-resident beneficiary ss98(3) assessable amount

UTD 13S

Interest in the net income included in assessable income

x Not reported

7.97

Non-resident beneficiary ss98(4) assessable amount

UTD 13S

Interest in the net income included in assessable income

x Not reported

7.98 Interposed entity name

DIS, DIV, INT,TDP, FSI, UTD

Not reported x Not reported

7.99Interposed entity TFN or ABN

DIS, DIV, INT,TDP, FSI, UTD

Not reported x Not reported

7.100

Managed investment trust fund payments







7.101

Amounts withheld from managed investment trust fund payments


7.105

Share of National rental affordability scheme tax offset

UTD 13B

Share of National rental affordability scheme tax offset

AShare of National rental affordability scheme tax offset

7.106Primary production income

UTD 13LShare of net income from trusts

A Share of primary production income

7.107

Share of credit for tax withheld where ABN not quoted

UTD 13P

Share of credit for tax withheld where ABN not quoted

AShare of credit for tax withheld where ABN not quoted

7.108

Deductions relating to distribution of primary production income

UTD 13X

Other deductions relating to amounts shown at N and L

AOther deductions relating to distributions

7.109

Deductions relating to distribution of non-primary production income

UTD 13Y

Other deductions relating to amounts shown at O, U and C

x A

Other deductions relating to non-primary production distributions

7.110 Transferor trust income UTD 19B Transferor

trust income Not reported

7.111 CFC income UTD 19K CFC income A CFC income

7.112 Net foreign rent UTD 20R Net foreign

rent A Net foreign rent

7.113Unfranked distributions from trusts

UTD

Not directly reported (will be mapped to 13U from 2014)

x C SDS Option 2 – Unfranked distribution

7.114Franked distributions from trusts

UTD 13CFranked distributions from trusts

A Franked distributions from trusts

7.118

Personal identification number (PIN)

FMD Not reported x x Not reported

7.119 ANZSIC code FMD Not reported x x Not reported






7.120Amount of deductible deposit

FMD

17D Deductible deposits x Not reported

17E

Net farm management deposits or repayments

x Not reported

7.121Date of deductible deposit

FMD Not reported x Not reported

7.122

Date of original deductible deposit

FMD Not reported x Not reported

7.123 Amount of repayment FMD

17N

Early repayments natural disaster

x Not reported

17R Other repayments x Not reported

17E

Net farm management deposits or repayments

x Not reported

7.124 Date of repayment FMD Not reported x Not reported

7.125 Amount of transfer in FMD Not reported x Not reported

7.126 Date of transfer in FMD Not reported x Not reported

7.127Transferor BSB number


7.128 Amount of transfer out FMD Not reported x Not reported

7.129 Date of transfer out FMD Not reported x Not reported

7.130Transferee BSB number


7.131

TFN withholding tax deducted from repayments in the financial year


7.132Amount of closing balance


7.133 Unclaimed moneys FMD Not reported x x Not reported





APPENDIX C – ATO LODGMENT VALIDATIONS – CORRECTIVE ACTION

(Applies to file transfer only)

Critical Errors - Reports cannot be lodged with critical errors, therefore corrective action needs to be taken before the file will be accepted by the ATO.

GE, FS and VR codes are critical errors.

Code Action requiredGE1 Remove non-ASCII charactersGE2 Lodge non-corrupt fileGE3 Lodge a new fileGE4 Lodge a new fileGE6 Contact your AUSkey administrator for correct access or correct AUSkeyGE7 Correct the Report specification version numberGE8 The total number of characters does not align to the record length.GE9 Correct the file formatGE10 Unzip the file within the zipped fileGE11 Complete the declarationGE12 Select T to test or P to lodgeGE13 Re-lodge as the file was not received

GE14 Check the validation report for the original file to confirm it was successfully lodged. If so, this is a duplicate. If not contact us

GE15 Lodge a new fileGE16 This is an unidentified error. Contact 1800 072 681 for assistance.

GE18 The file has exceeded the total number of convertible non-ASCII characters.Contact 1800 072 681 for assistance.

MAX1 The maximum number of errors and warnings has been reached.Correct errors and re-lodge

FS01 Correct the End of File (EOF) markerFS02 Delete incorrect Carriage return/Line Feed characters

FS03 Correct the Carriage Return character where there is no associated line or feed character of where a Line Feed character does not have a preceding Carriage return character

FS05 Insert Carriage Return/Line feed characters where expectedFS06 Correct the illegal character at the end of the last recordVR06 Provide data in this field. It cannot be blankVR09 The state or territory must be one of the valid valuesVR12 The ABN does not comply with the ABN algorithm.VR14 Report a valid dateVR20 Report a valid postcode



Code Action requiredVR28 The state or territory must be one of the valid valuesVR29 Report a valid Australian postcodeVR30 The postcode must be 0000 as the postal address line 1 is blankVR31 Report the correct email address including the @VR36 Correct the financial yearVR37 Correct the financial yearVR43 The Number of Records field must equal the total of the records in this fileVR133 Field must = A, C, R or NVR145 Field must = P, M or NVR149 Correct the file orderVR150 Correct the sequence numberVR151 Correct the financial yearVR155 Field must = UTDVR156 Correct the type of payment in the Investment account data recordVR157 Correct the sequence numberVR162 Correct the financial yearVR165 The address must contain at least one alpha character

VR216 Correct the Investor data record identifier or include an Investor data record if it has been omitted

VR217 Field must = DACCSUPP

VR218 Include an Investment account data record or a Farm management deposit account data record

VR229 Correct the financial year, either at the report end date or the financial year in the Investment body identity record.

VR231 Correct the sequence numberVR236 Correct the sequence of the data recordsVR319 The financial year must be earlier than 2014

VR320 Confirm the type of payment is FMD and date of payment is in 2013. If so report the interest.

VR358 Field must = 850VR359 Report the suburb, town or locality for the address reported in address line 1VR360 Field must = IDENTITYVR361 Field must = T for test or P for productionVR362 Field must = SOFTWAREVR363 Field must = PVR364 Field must = IDENTREGISTER1VR365 Field must = IDENTREGISTER2

VR366 Field must = IDENTREGISTER3

VR368 Field must = FILETOTAL



Code Action requiredVR369 Field must = IVR370 Report a valid number between 00000001-99999999VR371 FMD accounts cannot be reported using v8 or 9. Upgrade to v10 and relodgeVR374 Correct the report end dateVR376 Correct the financial year

Warnings – These messages are to advise there are potential errors in the file. While warnings do not prevent the lodgment they do, in some cases, prevent the information from pre-filling. Therefore it is advisable to take corrective action to address the warnings.

Code Action requiredWM01 Check content as this field must have at least one alpha characterWM02 This is a mandatory field that must be reportedWM03 Correct the stateWM04 Report valid data – cannot be blank or non-numericWM05 Correct the postcodeWM10 Correct the year reportedWM18 Report a valid dateWM50 Report the correct email address including the @WM60 Field must = Y, N or UWM61 Field must = S or NWM62 Field must = S or N

WM64 Confirm you operate on a SAP. If so, correct the year in the SAP) year end date. If not, the Reporting period indicator field must = N

WM65 Correct this number.

WM66 Correct either the number of investors in the account or confirm the correct number of Investor data records has been provided.

WM67 Confirm this is an FMD account. If so there can only be one investor.WM68 see WM66

WM69 Confirm the financial year reported in the Investment Body Identity record is correct. If so, the date here must be in the same year.

WM70 Correct the type of paymentWM260 The type of payment must be one of the valid values

WM71 Confirm this is a FMD account. If so, the type of payments must = FMD. If not, investigate why there is a DFMDACCT record.

WM72 The term of investment must be between 0 and 99WM74 Report a correct 12 digit numeric value

WM75 Confirm the TFN withholding tax deducted amount is correct. If so, then correct the amount of TFN withholding tax refunded.

WM76 Confirm the non-resident withholding amount deducted amount is correct. If so, then correct the amount of non-resident withholding amount refunded.



Code Action required

WM77 Report the correct BSB number

WM78 Confirm the type of payment is correct. If so, the amount reported in this field does not apply to the type of payment reported.

WM79 The investor entity type must be one of the valid valuesWM80 Confirm the type of payment is correct. If so the investor entity type can only = I or DWM81 Report the correct the investor tax file numberWM82 Field must = M, F or UWM83 The state or territory must be one of the valid valuesWM84 Report a correct 4 digit numeric valueWM85 Report a correct non-resident overseas country code. These are available from ato.gov.au

WM86 The number in this field does not match the number of Investment body identity data records provided

WM87 The number in this field does not match the number of Investment account data records provided

WM88 Report a correct 8 digit numeric valueWM89 Report a correct 8 digit numeric value

WM90 The number in this field does not match the number of Supplementary income account data records provided

WM91 The number in this field does not match the number of Farm management deposit account data records provided

WM92 The number in this field does not match the number of Investor data records providedWM96 Correct the investment body numberWM115 Confirm the payment type is correct. If so then an amount should be reported in this fieldWM116 Report a correct 11 digit numeric valueWM139 Confirm there is an Interposed Entity. If so then report the entities TFN or ABN here.

WM140 Confirm the type of payment is correct. If so this field must less than or equal to the sum of Unfranked dividends declared to be CFI and Unfranked dividends declared not be CFI

WM141 Confirm the type of payment is correct. If so this field must be greater than or equal to the sum of Franking credits and Franked dividends.

WM142 Field must = 2WM143 Field must = FMD

WM147 Confirm the TFN withholding tax deducted amount is correct. If so, then correct the amount of TFN withholding tax refunded.

WM156 Report a valid type of paymentWM249 Confirm the type of payment is correct as these fields only relate to DIV and UTD

WM250 Report a valid date. If the full date is not available some of the components can be zero filled.

WM253 Field must = T for test or P for productionWM254 Report the postcode for the address in address line 1WM255 Report the state or territory for the address in address line 1



Code Action requiredWM256 Report the suburb, town or locality for the address in address line 1WM257 Report the country for the address in address line 1WM258 Confirm the Investor entity type is correct, and if so report the non-individual investor nameWM259 Report the postcode for the address in address line 1WM260 Field must = COMMERCIAL or INHOUSE followed by the supplier/company name

WM287

Correct one of these fields:Unfranked distributions from trustsFranked distributions from trustsUnfranked dividends not declared to be conduit foreign incomeUnfranked dividends declared to be conduit foreign incomeFranked dividends Franking credit

WM293 Correct the type of investment valueWM321 The file contains non ASCII characters


Documents

Insert Document Title - Australian Taxation Officesoftwaredevelopers.ato.gov.au/sites/default/files/... · Web viewFile Ref: [FILE NO.] Author Adams Created Date 06/28/2016 20:44:00