Issue
This page explains how to process the CGT relief application event using the segregated method.
The tax consequences of choosing to apply CGT relief using segregated method are:
- The fund is deemed to have sold and immediately repurchased the asset at the cessation time
- The CGT discount period is reset
- The cost base of the asset is reset to market value at the cessation time
- Any capital gains or losses on the deemed sale are disregarded, therefore the notional deferred capital gains amount is nil
Resolution
Navigate to Fund Level > Members > CGT relief application
Class should automatically determine if the fund is using the segregated method to apply the CGT relief. The fund should either:
- Have the Pension Exemption (Actuarial)% of 100 recorded by
Navigate to Fund Level > Settings > Fund Defaults > Fund Policies
or - Be a segregated fund
Navigate to Fund Level > Settings > Fund Defaults
The effective Fund Policy for the relevant period should have 'Assets Segregated for Pensions' set to 'Yes', and
Navigate to Fund Level > Investments > Maintain Asset Pools
There is a pool of assets segregated specifically to support one or more pension accounts for 2016/17 FY
Ensure the fund policy is updated and the segregation status is properly set up before processing this event.
To add a new fund policy for 2016/17 FY
Navigate to Fund Level > Settings > Fund Defaults
Click on Add new fund policy and set the start date to 1/7/2016.
- Enter the CGT Relief Date
You may apply the CGT relief on the date when the assets cease being a segregated current pension asset during the pre-commencement period, between 9 November 2016 to 30 June 2017.
- Enter the description for the event, Class defaults to "CGT Relief Application"
- Select the parcels or investment accounts to apply for the CGT relief
- Update Parcelling (Optional)
If there are unmatched parcels arising as a result of disposals, cost base or quantity adjustments of the investment accounts, an Update button will appear in the Update Parcelling column. For any selected investment accounts that are applying for the CGT relief but have unmatched parcels, you need to click on the Update button to match the parcels first before submitting the event. - Finalise the event
Once you have completed all relevant sections in the CGT Relief Application event, click Submit.
After the event is submitted, the following information becomes available:
- Event Details
- Audit Details
- Related Events
- Journal Entry
- Event Postings
- Documents
Refer to our knowledge article on the CGT relief application for more details.
For Custom Holding Accounts, the total gain column is editable which allows you to manually specify the net capital gain (after applying 1/3 CGT discount).