How to enter the early stage venture capital limited partnership (ESVCLP) tax offset and early stage investor (ESI) tax offset in Class?
From 1 July 2016, there are two new non-refundable carry forward tax offsets available for SMSFs:
- Early stage venture capital limited partnership (ESVCLP) tax offset
- Early stage investor (ESI) tax offset
This article explains how to process these tax credits in Class.
Class does not automatically process this offset so you will need to follow this manual workaround:
Adjust the provision for income tax for accounting purpose
Navigate to Fund Level > Periodic Processing > Period Updates
- Click on View/Rollback
- Click on Post Fund Income Tax Expense
- Manually adjust the 'Provision for Income Tax' to account for the tax offset
|Provision for income tax||Example||ESVCLP /
|Tax Offset Amount
|Positive (Credit Balance)||10,000||500||9,500|
|Negative (Debit Balance)||(10,000)||500||(10,500)|
Manually add the offset into the SMSF Annual Return
Navigate to Fund Level > Periodic Processing > Browse Tax Lodgments
- Click on the relevant tax year
- Click on the 'Annual Return' link
- Go to Section D: Income tax calculation statement > Label D1 for Early stage venture capital limited partnership (ESVCLP) tax offset (or, D2 for Early stage investor (ESI) tax offset) and enter the amount.
Both tax credits are not refundable and the unused portion can be carried forward to the next income year.
Class currently doesn't have the ability to track this tax credit therefore users will need to manually track the unused proportion outside of Class. You can refer to our knowledge article on How to track the Early Stage Venture Capital Limited Partnership (ESVCLP) tax offset.
If there is an unused ESVCLP or ESI Tax Offset, the Provision for Income Tax Adjustment in Step 1 should be reduced to the amount of tax offset claimable in the current financial year.