This article will illustrate how to distribute any retained earning amounts to the relevant beneficiaries of a Trust entity.
This function is only available after you have run a period update
Discretionary Trust type
Navigate to Fund level > Periodic Processing > Period Updates
- Select the required Financial Year
- Run the Period Update (if not done so already)
- Click the Distribute Retained Earnings button
- The Beneficiary Distribution screen will open
- Adjustment to comply with Definition of Trust Income. Optional Field. Enter an adjustment to comply with the definition of trust income according to the Trust deed. This will adjust the amount available for distribution and allocate the adjustment amount to an income definition reserve.
- Transfer to/(From) Capital Loss Reserve. Pre-Calculated Field. Where there are net capital losses for a financial year, Class will automatically transfer the capital losses to a Capital Losses Reserve and disregard these from the amount available for distribution. Where there is a capital gain for a financial year and there is a balance in the Capital Losses Reserve, then the losses are automatically transferred out of this reserve to offset the capital gains.
- Transfer to/(From) Asset Revaluation Reserve. Pre-Calculated Field. This field only displays if the trust is set to carry assets at market value and will automatically transfer the unrealized gains to the Asset Revaluation Reserve and disregard these from the amount available for distribution.
- Retained Earnings Available for Distribution. Displays the total amount available for distribution to the beneficiaries
- Enter $ or % to allocate the amounts you wish to distribute among the beneficiaries listed
- Choose a beneficiary from drop-down in Residual amount beneficiary to allocate the residual amount
- Click Submit to save
Unit Trust type
Please note that the screen navigation and steps 1 through 4 are the same as the Discretionary Trust type above. Unit Trust type has the following 2 additional fields:
- Displays the amounts to be distributed to the beneficiaries. These amounts are automatically calculated based on the beneficiaries' unit quantity as at 30 June.
- Unit Quantity. Displays the beneficiaries unit quantity as at 30 June.