ISSUE

How do I process the transfer of liability to a life insurance company and also reduce the contribution cap by this amount?

RESOLUTION

To resolve this issue:

Step 1: Add a New Income/Expense type

Step 2: Process Transfer of liability to life insurance company event

Step 3: Update the Income type to be Non-taxable

Step 4: Process negative Transfer of Liability to life insurance company event

Step 5: Update Provision for Income Tax

Step 6: Update the Annual Return 

Add a New Income/Expense type

Navigate to Business Level > Settings > Fund Income 

1. Choose Fund Income as Category type
2. Click on Yes to Tax Assessable
3. Select relevant Tax Return label.
   
   

Refer to our User Guide, Income and Expense Type Settings for detailed instructions.

Process Transfer of liability to life insurance company event

Navigate to Fund level > Transactions > Fund General Income

1. Choose the new income type
   
   

Update the Income type to be Non-taxable

Navigate to Business level > Settings > Fund income

1. Click on the newly established income type
2. Click on Edit 
3. Select No to Tax Assessable

Process negative Transfer of liability to life insurance company event

1.  Choose the new income type
   
   

Update Provision for Income Tax

Refer to View and Amend Income Tax Expenses

Update the Annual Return

This will reduce the contribution amount.

Refer to How to update Annual Return to reflect the amendment of Provision for Income Tax