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How should the tax and levy due to the tax office be accounted for?

Discussion in 'Superannuation, SMSF & Personal Insurance' started by netd, 8th Dec, 2012.

  1. netd

    netd Member

    Joined:
    15th Jun, 2012
    Posts:
    12
    Location:
    Sydney, NSW
    Should the tax and levy due for the income of the 2012 financial year reduce the member account balance at 30 June 2012 or 30 June 2013 (after it's been paid, 28 Feb 2013)?

    For example if a SMSF stared in Feb 2012 had the following at 30 June 2012;

    assessable contributions $0
    non concessional contributions $25000
    Bank balance $11000 (Interest $1000)
    Share value at 30 June 2012 $18000 (purchase price $15000)
    Total assets of the fund $29000

    The total assessable income is $1000 (just the bank interest)
    Tax payable is $150 (15% of $1000)
    supervisory levy is $200
    So the amount due to the tax office is $350, this will be paid when it falls due, 28 Feb 2013.

    How should the tax and levy due to the tax office be accounted for?

    A. Not included the in the 2012 accounts.
    -Member closing account balance (section H label W)$29000.
    -Total assets (section H label U) $29000. and
    -Total liabilities (section H label Z) $29000.
    Then include the $350 due to the tax office in the 2013 financial year.

    or

    B. Include the tax and levy in the 2012 accounts.
    -Member closing account balance (section F label S) $28650 ($29000 minus the $350 tax and levy ).
    -Total assets (section H label U) $29000.
    -Member closing account balance (section H label W) $28650
    -Other liabilities (section H label Y) $350 (the $350 tax and levy ).
    -Total liabilities (section H label Z) $29000.

    or

    C. Some other method, please explain.


    Thanks for any help with this.
     
  2. Superman

    Superman Well-Known Member

    Joined:
    6th Nov, 2007
    Posts:
    343
    Location:
    Gold Coast, QLD
    Take up the tax payable at 30 June 2012. It will sit on the balance sheet (statement of financial position) as tax payable liability.

    Do not take up the SMSF levy expense until it is paid (when the tax is paid in Feb 2013).

    So I guess it is option C - although option B is pretty close - just use $150 rather than $350.

    All the best

    SM
     
  3. netd

    netd Member

    Joined:
    15th Jun, 2012
    Posts:
    12
    Location:
    Sydney, NSW
    Thanks Superman