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Correcting trust return distribution when MYOB Tax recalculates the foreign income tax offset (FITO)

This support note applies to:

  • AO Tax (AU)

  • AE Tax Series 6 & 8 (AU)

  • AE Tax (AU)

Article ID: 33905

MYOB Tax recalculates the foreign income tax offset (FITO) after you've distributed it to the trust beneficiaries.

This changes the amount at item 23: label Z and makes the return invalid for PLS lodgment.

It happens when:

  • there's more than one beneficiary of the trust under a legal disability and

  • you've completed a foreign income worksheet (for) or

  • you've pressed F4 for an estimate of tax payable.

We don't have a workaround for an F4 estimate where there are:

  • multiple beneficiaries under a legal disability or

  • mixed distributions, for example, infant beneficiaries or non-resident beneficiaries or income to which no beneficiary is presently entitled.

Before you begin

  1. If you've completed a foreign income worksheet (for) at item 23:

    1. Print the for worksheet so that you have a record of the amounts entered.
      These may all need to be keyed at item 23: Foreign income labels—B, V and Z at a later stage. In particular, make a note of the FITO originally calculated.

    2. Delete the for worksheet.

  2. If the for worksheet was automatically created because of a distribution received from a partnership or another trust:

    1. Edit the relevant dip or the dit worksheet at item 8: Partnerships and trusts.
      Make a note of the amounts before deleting them from the dip or the dit worksheets.

    2. Once you've done this, you can delete the for worksheet.

To change FITO at item 23

Do not press F4 at any time during the following procedure. If you do, the same problem will occur and you'll need to start the procedure again.

To fix the return so that the distribution of the foreign income and foreign income tax offsets agree with the amounts at item 23: label Z, you'll need to:

  1. Complete the checkboxes on the front cover choosing the applicable trustee tax table.

  2. Go to item 23 and enter amounts for:

    1. Gross foreign income

    2. Net foreign income

    3. Foreign income tax offset.

  3. Go to the Distribution statement and check that the amounts you originally distributed to the beneficiaries match what you entered.

  4. Press F3. The validation report shows that there are no crosscheck errors with the income or credits and offsets.

  5. You can now complete and lodge the return via PLS.