What is Trust Income Schedule (TIS)?
The Trust Income Schedule (TIS) is a new schedule that needs to be lodged with the Tax Returns for individual and non-individual entities, where they are beneficiaries entitled to Trust income.
It includes an overview page of the entity and a page for each security detailing the aggregate distribution income for that financial year.
Why have the ATO introduced the TIS?
It is one of the initiatives as part of the Modernisation of Trust Administration Systems (MTAS) project that was announced in March 2022 as part of the Federal Budget.
The aim is to assist accurate reporting and facilitate consistency of reporting across beneficiaries of different entity types.
Which securities need to be reported in a TIS?
Securities that are based on trust structure, for example: listed trusts, managed funds, ETFs, unlisted trust, stapled securities, wrap platform investments
When is the first year that a TIS is required from?
From 1 July 2023 (FY24).
Which entities will Class support a TIS for?
For SMSFs and Trusts. This will includes support for electronic lodgment of the TIS along with the Tax Returns for both entity types.
When is a TIS required to be lodged for an SMSF?
SMSF must complete the TIS with the SMSF annual return when the SMSF has been made entitled to any distribution income from a trust. This is when there are values recorded in the following labels through SMSF annual return's Section B Item 11 Income:
- Label A: Net capital gain
- Label D1: Gross foreign income
- Label M: Gross trust distributions
- Label U2: Net non-arm's length trust distributions
When is a TIS required to be lodged for a Trust?
Trust must complete the TIS with trust annual return when the trust has been made entitled to any distribution income from a trust. This is when there are values recorded in the following labels through Trust annual return's Item 8 Partnerships and Trusts:
- Label Z: Share of net income from trusts (Primary production)
- Label R: Share of net income from trusts less capital gains, foreign income and franked distributions (Non-primary production)
- Label F: Franked distributions from trusts
- Label D: Share of franking credits from franked distributions
Why can't I view the TIS for a windup fund?
If you had completed the Tax Finalisation before the June 2024 release, you will need to rollback the Tax Finalisation and re-process it in order to view the TIS.
Why do I encounter a validation error 'TFN for TIS is invalid' for a wind up fund?
If the Tax return for the wind up fund was approved before the June release then it won't include support for the Trust Income Schedule. You should roll back and reprocess the tax finalisation, then discard and regenerate the annual return and approve the return and schedules again, including the Trust Income Schedule.
Does the TIS need to be signed off by Trustees?
No, as the TIS will be covered by the Electronic Lodgment Declaration.
Is a TIS required if SMSF has 100% Exempt Current Pension Income?
Yes, the ATO has confirmed that SMSFs must still complete a TIS even though Section B Income of the SMSF Annual Return is blank. Class will auto-populate the TIS in this scenario.
How does Class auto-populate the TIS?
Class will auto-populate the TIS based on the distribution events and the Tax Statements events. Class aggregates all income for a particular security so if there are multiple distribution events or multiple distribution Tax statements these will all be reported under the one security in the TIS.
Will Class auto-populate the TIS for unlisted securities and Custom Holding accounts?
Yes, based on the distribution events and distribution Tax Statements with the same logic as for listed securities mentioned above.
How will Class auto-populate the TIS when the distribution event and distribution tax statement don't reconcile for a security?
Class will always report the amount to match the total of the distribution events but still use the components in the distribution Tax Statement where it has been reported. You can review worked examples for different scenarios in this Knowledge Base article here
Which of the following fields are mandatory in the TIS?
Name of Distributing Trust - This is the only mandatory field in the distribution details section. Class will auto-populate based on the Issue Description field which for listed Trusts, is the name provided by ASX reference in the data feed. This ensures consistency and enables the ATO to easily identify the security.
When should the ABN & ACN for securities and Investor Number be completed in the TIS?
These fields are not mandatory, Class don't auto-populate these fields.
ABN or investor number can be included for listed securities. The investor number can help you differentiate when a security is reported multiple times in the TIS. e.g. the same securities is held in multiple broker/wrap accounts.
ABN or ACN of the corporate trustee can be reports for unlisted securities.
What is the maximum number of securities that can be reported in the TIS?
The ATO accepts up to 150 securities reported in the TIS.
When there are more than 150 securities that need to be reported, the 150th security should be an aggregate of all remaining securities.
Class will not aggregate when there are more than 150 securities in the TIS, this will need to be manually updated in the UI.
How should a One Line Wrap be reported in a TIS?
Where a Wrap provides a consolidated Tax Statement, the ATO will accept this consolidated Tax statement being reported in the TIS for simplicity of compliance
There are no validation messages that will prevent a TIS being lodged when a One Line Wrap has been reported in Class.
Does Class support TIS in the MYOB and Xero export for SMSF Annual Return?
Class supports TIS exports for both MYOB and Xero. MYOB supports 99 securities instead of 150 in their import, entities with more than 99 securities will need to manually consolidate them.