Issue
A bug existed in Class that caused some investments to not have AMIT proportionally allocated between multiple parcels. The issue occurred when the following criteria was met:
- Entities used either the Minimise Taxable Gain or Maximise Taxable Gain Parcel Match Methods and
- A partial disposal occurred for an investment during a financial year and
- There was an AMIT allocation for the investment in that financial year.
This bug was fixed on 14th September 2024 which will ensure AMIT is proportionally allocated from this date onwards when the above criteria is met. This fix doesn't apply to parcel matches that occurred before this date.
Resolution
To correctly fix historical records, Period Updates would need to be rolled back and reprocessed which could potentially impact Financials and Tax Returns for audited funds, this fix is unlikely to be practical as it may require reopening multiple Financial Years and in many cases the impacts would be immaterial.
We recommend user apply the below workaround if required (e.g. to match with the Wrap/Platform report, or apply AMIT proportionally to remaining open parcels)
Step 1: Generate Unrealised Capital Gain report
Step 2: Calculate the AMIT amount to be distributed proportionally to all remaining open parcels
Step 3: Create new Parcel Edit Points
Generate Unrealised Capital Gain report
Navigate to Fund level > Reports > Run Report > search for Unrealised Capital Gain report > type 30/06/2023 for As At Date field if you would like to reallocate the AMIT on 1/7/2023 > Run
Calculate the AMIT amount to be distributed proportionally to all parcels
It is not guaranteed the following calculation will match with the actual AMIT cost base adjustment amounts that should have been allocated to the parcels. You can also refer to the Wrap/Platform report where the parcel cost base information if applicable.
- Apply the below formula to calculate the AMIT amount to be allocated proportionally to each parcel based on the total available AMIT amount.
Parcel Quantity (1) / Total Quantity (2) * Total AMIT Amount (3)
Example:
AMIT for parcel dated 1/7/2018 = 100 / 1,000 * (-100) = (-10)
AMIT for parcel dated 15/5/2019 = 200 / 1,000 * (-100) = (-20) - Continue for remaining parcels.
Create new Parcel Edit Point
Make sure you've run 30 June Period Update, done Finalise Tax and closed previous financial year so that the new parcel edit points could be created successfully at 1 July of the following year.
Navigate to Fund level > Investments > Browse Holding Accounts > Select the desired investment account
-
Click on Maintain Parcel Edit Points button
- Click +Add on the top left
- Click Reset to original position button
- Click +Add (1) next to Adjustment under each parcel that needs the AMIT amount added to enter the details.
Enter 30 June of previous year for the Adjustment date (e.g. 30/6/2023) (2)
Enter calculated AMIT amount from above steps (3)
Choose Type as AMIT (4)
Enter Description (e.g. Adjustment) (5) - For the parcel that has multiple AMIT adjustments, retain only the latest one and enter the new calculated AMIT value.
- Click Save on bottom right once having done for all parcels
- A pop-up screen will appear - select Yes
- Generate Unrealised Capital Gains as at the date of created new parcel edit points to review the AMIT cost base adjustment amounts.