Guide to your
Annual Tax Statement
30 June 2014
About this guide
Assumptions
This guide aims to assist individual taxpayers in completing
their tax return for the 2013/14 financial year. It contains
basic information about the treatment of your income
distributions as shown in your annual tax statement.
In preparing this guide, we have assumed that:
s you are an individual taxpayer
s you are an Australian resident for income tax purposes
s you use this guide in conjunction with the 2014 Individual
Tax Return instructions to complete your tax return
s you hold your units for the purposes of investment
and that the Australian Capital Gains Tax (“CGT”) rules
apply to you
Importantly, the guide is not a substitute for tax advice. It
has been prepared based on a set of assumptions, any or
all of which may not be applicable to you. If you are in any
doubt about your personal tax position we recommend that
you seek professional tax advice.
Please note: from 1 July 2014, investors who redeem their
unit holdings in the Vanguard Investor Index Funds will no
longer receive a CGT statement and CGT guide by default.
Investors will still receive a CGT statement for this financial
year (2013/14). If you would like to continue to receive a
CGT statement and CGT guide, please contact our Client
Services team (1300 655 101).
2
Completing your tax returns
The following information relates to your investment in the
Vanguard® Investor Funds. If you had income from
any other investments during the year, you will need to
combine the information from your other investments with
the information provided by Vanguard when completing your
tax return. Tax return references refer to the Tax return for
individuals (supplementary section) (NAT 2679-06.2014).
Guide to your Annual Tax Statement
FAQ’s
What if I sold units during the year?
If you disposed of any units during the year, you will receive a
capital gains tax statement along with a separate capital gains
tax statement guide to assist you in completing your tax return.
What other information can help me with my tax return?
The Australian Taxation Office (“ATO”) has a helpline for
personal tax enquiries, which is 13 28 61. In addition, the
ATO has a number of publications which will help you to
understand your obligations and complete your return:
s
s
s
s
s
Individual tax return instructions 2014
(NAT 71050-06.2014)
Individual tax return instructions supplement 2014
(NAT 71051-06.2014)
You and your shares 2014 (NAT 2632-6.2014)
Guide to foreign income tax offset rules 2013-14
(NAT 72923.2014)
Personal investors guide to capital gains tax 2014
(NAT 4152)
These publications are available for download from the
Vanguard website at vanguard.com.au/faq_taxstatement,
from the ATO website at www.ato.gov.au or by telephoning
the ATO on 1300 720 092.
What is a distribution?
A distribution from a managed fund represents your share
of the income earned by a fund. Each fund may earn
different types of income, for example dividends, interest
and capital gains. Additionally, the income may be Australian
sourced or foreign sourced. The funds are structured as a
unit trust which means the type of income earned by the
trust generally retains its character when paid to you as a
distribution. The components required to complete your tax
return are shown in Part A of your annual taxation statement.
The components of the distributions you received are
detailed in Part B of your annual taxation statement.
What are tax-deferred amounts?
Your distributions may include a tax deferred component.
Any such component is detailed in Part B of your annual
taxation statement, under “other non-assessable amounts”.
The tax deferred component generally arises from capital
allowances and depreciation amounts received by a fund
from listed property trusts. The tax deferred component is
not included in your tax return for the year. However, the
amount received reduces the cost base of your units in
the fund, meaning that the amount is assessed as part of
the capital gain in the year in which the total tax deferred
amounts received exceed the cost base of your units, or
reduces the capital loss when you eventually sell your units.
and the CGT concession amounts are not equal. As the
components received by the fund retain their character when
they are distributed to you (see “What is a distribution”
above), this can result in the discount capital gain and CGT
concession amount being unequal.
When do I receive a management fee rebate?
You will receive a management fee rebate when the
management fee applicable on your investment is lower than
the management fee that has been charged to the fund. The
management fee rebate will be paid to you as a reinvestment
in additional units or, if you have withdrawn from the fund, it
will be paid to you as cash.
Please note, the amount shown in your annual tax statement
represents only those management fee rebates that have
been paid to you via a reinvestment in additional units. For
management fee rebates paid you as cash, please see a
separate management fee rebate statement that has been
provided to you upon payment in cash of the management
fee rebate.
We recommend you see your tax advisor to determine
whether this amount is assessable as the tax treatment
of management fee rebate is unclear.
Can I use e-tax?
The ATO allows you to prepare and lodge your tax return
online using e-tax which is available for download from the
ATO website, www.ato.gov.au. The information provided
in Part A of your annual taxation statement can be used
to complete the worksheet in the section titled “Managed
Funds” which is located in the “Income” section of e-tax.
You should carefully read the instructions applying to the
“Managed Funds” section, as there are circumstances when
this section should not be used.
What if I’m not an individual taxpayer?
The information provided in this guide assumes you are an
Australian resident individual taxpayer. If your investments
in the Vanguard funds are made through a trust, company or
superannuation fund, you may need assistance from your
accountant or tax adviser in the completion of your tax return.
Why are the discount capital gains and capital gains CGT
concession and discount capital gain amount not equal?
The funds are eligible for the 50 percent CGT concession
on shares held for at least 12 months. It could therefore be
expected that the amount of discount capital gain and the
CGT concession amount would be equal. However, from
time to time, the funds receive distributions from listed
property trusts where the amount of discount capital gains
3
Australian income
The Australian sourced income shown in Part A of your annual
taxation statement relates to the tax return form as follows:
non-primary production income at label 13U, other deductions
relating to distributions at label 13Y, franked distributions
at label 13C, franking credits at label 13Q, credit for TFN
amounts withheld at label 13R, credit for tax paid by trustee
at label 13S and management fee rebate at label 24V.
There are circumstances in which your ability to claim a
franking credit may be reduced. For further details please
refer to the ATO publication “You and your shares 2014”
(NAT 2632-6.2014).
Example 1: Australian Income
2014
Part A - Summary of 2014 Individual Tax Return (supplementary section) items. The following tax return items are valid
for Australian Resident Individual Unitholders only.
Use Individual tax return instructions supplement 2014
X
Non-primary production income
Franked distributions
Print your full name.
Credit for TFN amounts
Title – for example,
Mr, Mrs, Ms, Miss
Surname or
withheld
family name
Credits for tax paid by trustee
Tax Return Label
$9,782,165.31
13U
See the Privacy note in the
$0.00
on
page 10 of your Tax return
for individuals 2014.
Other deductions relating to distributions
Franking credits
Amount
13C
$1,200,596.47
13Q
$0.00
13R
$0.00
13S
$0.00
24V
Given names
Management fee rebates
INCOME
13
Primary production
Include any deferred non-commercial business losses from a prior year at X or Y
as appropriate and insert the relevant code in the
box.
Distribution from partnerships
Share of net income from trusts
Landcare operations and deduction
for decline in value of water facility
Other deductions relating to
and L
amounts shown at
L
X
,
.00
,
.00
,
.00
,
.00
LOSS
Net primary production amount
Non-primary production
Distribution from partnerships,
less foreign income
Share of net income from trusts, less capital
gains, foreign income and franked distributions
Franked distributions
from trusts
O
,
.00
U
,
.00
C
,
.00
Landcare operations expenses
J
,
.00
Other deductions relating to
amounts shown at O , U and C
Y
,
.00
,
LOSS
,
Share of credits from income and tax offsets
Share of credit for tax withheld where
Australian business number not quoted P
continued
Share of franking credit
from franked dividends Q
Gross rent P
Rent
withheld from interest, dividends R
and unitInterest
trust distributions
deductions Q
Credit for TFN amounts withheld from
paymentsCapital
from closely
trusts M
works held
deductions
Share of credit for tax paid by trustee
Other rental deductions
Share of credit for amounts withheld
from foreign resident withholding
Share of National rental
affordability scheme tax offset
22
.
,
,
,
,
,
S
U
A
,
B
,
,
,
,
. .00
.
.
.
.00
14
P less ( Q +
+ U)
.00
.00
.
23
24
.00
,
.
,
INCOME
.00
,
Show amounts of:
capital gains from trusts at item 18 and
foreign income at item 19 or 20.
Net non-primary production amount
21
13Y
$2,571,555.11
LOSS
Net
rent
,
,
.00
W
,
,
.00
A
,
,
.00
.00
1 complete the Business and professional
Yitems schedule
To complete this item,
youofneedCategory
to read and
for individuals
2014.
,
,
Type
You cannot lodge a paper
incomereturn. You must lodge your tax return using e-tax or a registered tax agent.
.00
Category 2
V
,
NAT 2679-06.2014
Tax withheld – lump sum
payments in arrearsSensitive
Taxable professional income
Z
,
.00
(when
, completed)
,
Page 13
.00
LOSS
to 24
Guide to your Annual Tax Statement
$
,
,
.00
4
Foreign income
The foreign sourced income shown in Part A of your annual
taxation statement relates to the tax return form as follows:
assessable foreign source income at label 20E, Australian
franking credits from a New Zealand company at label
20F, other net foreign source income at label 20M, foreign
INCOME
continued
income tax
offsets at label
20O.
15
There are circumstances in which your ability to claim a
To complete this item, you need to read and complete the Business and professional items schedule for individuals 2014.
foreign incomeYou
taxcannot
offsetlodge
mayabe
reduced.
Formust
further
paper
return. You
lodgedetails
your tax return using e-tax or a registered tax agent.
please refer to the ATO publication “Guide to foreign income
tax offset rules 2013-14” (NAT 72923.2014).
16
To complete this item, you need to read and complete the Business and professional items schedule for individuals 2014.
You cannot lodge a paper return. You must lodge your tax return using e-tax or a registered tax agent.
17
Deductible deposits
D
,
.00
exceptional circumstances
C
,
.00
Example 2: Foreign Income
Early repayments
Early repayments
.
00items. The following tax return items are valid
Part A - Summary of 2014 Individual Tax Return (supplementary
section)
,
for Australian Tax Resident Individual
.00
Other Unitholders
repayments Ronly.
,
Net farm management
deposits or repayments Amount ,
Assessable foreign source income
Did you have a capital gains
18
G NO
Australian franking credits from
a New
Zealand
company
tax event
during
the year?
Other net foreign source incomeHave you applied an
Foreign income tax offsets
exemption or rollover?
M
LOSS
,
.00 Label
Tax Return
$220,981.31
NO
20E
You must print X in the
box at G if you had an
amount of capital$0.00
gains from a trust.
YES
20F
$220,981.31
YES
20M
$31,615.00
Net capital gain
Total current year capital gains
H
,
.00
Net capital losses carried
forward to later income years
V
,
.00
A
,
,
.00
20O
19
Did you have either a direct or indirect
interest in a controlled foreign company (CFC)?
Have you ever, either directly or indirectly, caused
the transfer of property – including money –
or services to a non-resident trust estate?
W
NO
YES
CFC income
K
,
,
.00
NO
YES
Transferor
trust income
B
,
,
.00
,
,
,
,
.00
,
,
.00
20
Assessable foreign source income
.00
LOSS
Other net foreign employment income
L
Net foreign pension or annuity income
WITH an undeducted purchase price
D
,
,
.00
Net foreign rent
R
,
,
.00
Other net foreign source income
M
,
,
,
,
Also include at
Australian franking credits from a
New Zealand franking company that you have received
indirectly through a partnership or trust distribution.
Net foreign employment income –
payment summary
Australian franking credits from
5
.00
.00
LOSS
LOSS
LOSS
LOSS
U
,
Exempt foreign employment income
Foreign income tax offset
O
P
,
NO
.00
,
,
During the year did you own, or have
an interest in, assets located outside Australia
which had a total value of AUD$50,000 or more?
Page 14
LOSS
Net foreign pension or annuity income WITHOUT
an undeducted purchase price
.00
.
YES
Sensitive (when completed)
TAX RETURN FOR INDIVIDUALS (supplementary section) 2014
Guide to your Annual Tax Statement
Capital gains
Did you dispose of any units during the
year?
The capital gains shown in Part A of your annual taxation
statement relate to the tax return form as follows: total
current year capital gains at label 18H and net capital gain at
label 18A.
If you disposed of units during the year, you will have
received a capital gains tax statement along with a
separate capital gains tax statement guide to assist you
INCOME continued
in completing Question 18 of your tax return. You will need
to combine the capital gains information from your capital
15
gainsand
taxprofessional
statement
with
the capital
gains 2014.
information from
To complete this item, you need to read and complete the Business
items
schedule
for individuals
your
annual
statement
You cannot lodge a paper return. You must lodge your tax return
using
e-tax ortaxation
a registered
tax agent. in completing Question 18
of your tax return.
16
To complete this item, you need to read and complete the Business and professional items schedule for individuals 2014.
You cannot lodge a paper return. You must lodge your tax return using e-tax or a registered tax agent.
Example 3: Capital Gains
Part A 17
- Summary of 2014 Individual Tax Return (supplementary section) items. The following tax return items are valid
.00
for Australian Resident Individual
Unitholders
only.
D
Deductible
deposits
,
Early repayments
exceptional circumstances
Total current year capital gains
Net capital gain
C
Early repayments
Other repayments
R
,
.00
Amount
Tax Return Label
,
.00$4,347,881.64
18H
,
.00$2,173,940.82
18
Did you have a capital gains
tax event during the year?
G
NO
YES
Have you applied an
exemption or rollover?
M
NO
YES
18A
LOSS
Net farm management
deposits or repayments
,
,
.00
You must print X in the
box at G if you had an
amount of capital gains from a trust.
Net capital gain
Total current year capital gains
H
,
.00
Net capital losses carried
forward to later income years
V
,
.00
A
,
,
.00
19
Did you have either a direct or indirect
interest in a controlled foreign company (CFC)?
Have you ever, either directly or indirectly, caused
More information
the transfer of property – including money – W
or services to a non-resident trust estate?
Internet:
vanguard.com.au/taxation
NO
YES
CFC income
K
,
,
.00
NO
YES
Transferor
trust income
B
,
,
.00
,
,
.00
,
,
.00
20
Contacting the ATO
.00
Internet:
ato.gov.au Assessable foreign source income
,
,
Other net foreign employment income
Telephone: ATO 13 28 61
or ATO publications 1300 720 092
Net foreign pension or annuity income WITHOUT
L
Net foreign pension or annuity income
WITH an undeducted purchase price
D
,
,
.00
Net foreign rent
R
,
,
.00
Other net foreign source income
M
,
,
.00
,
,
.00
Australian franking credits from
O
P
LOSS
LOSS
,
NO
.00
,
,
Foreign income tax offset
LOSS
LOSS
,
Exempt foreign employment income
During the year did you own, or have
an interest in, assets located outside Australia
which had a total value of AUD$50,000 or more?
LOSS
an undeducted purchase price
Also include at
Australian franking credits from a
New Zealand franking company that you have received
indirectly through a partnership or trust distribution.
Net foreign
™ employment income –
Connect with Vanguard
payment summary U
vanguard.com.au/taxation > 1300 655 101
LOSS
.00
.
YES
VanguardPage
Investments
227263) is(when
the product
issuer. We have not
yourFOR
circumstances
into accountsection)
when 2014
preparing this
TAXtaken
RETURN
INDIVIDUALS (supplementary
14 Australia Ltd (ABN 72 072 881 086 /AFS Licence
Sensitive
completed)
publication so it may not be applicable to your circumstances. You should consider your circumstances and our Product Disclosure Statements (PDSs) before making any investment
decision. You can access our PDSs at www.vanguard.com.au or by calling 1300 655 101. Past performance is not an indication of future performance. Taxation considerations are
based on current laws and their interpretation at 30 June 2014. This publication was prepared in good faith and we accept no liability for any errors or omissions.
The extracts of the Australian Taxation Office’s Individual income tax return (supplementary section) included in this publication is copyright of the Commonwealth of Australia
and is reproduced by permission. Apart from any use as permitted under the Copyright Act 1968, no part may be reproduced by any process without prior written permission from
the Commonwealth Copyright Administration, Attorney-General’s Department. Requests and inquiries concerning reproduction and rights should be directed to Commonwealth
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© 2014 Vanguard Investments Australia Ltd.
GTAX 062014