Re: [GNC] Financial Account Structure for Australian Shares and EFTs

[Chris Good]

Message: 7
Date: Fri, 27 Aug 2021 22:39:23 +1000
From: flywire 
To: Gnucash Users 
Subject: Re: [GNC] Financial Account Structure for Australian Shares
and ETFs
Message-ID:

Content-Type: text/plain; charset="utf-8"

Thanks Chris, that helps me understand it a bit more but a little
differently. I see Franking Credits as Income. Maybe someone with a formal
accountancy background has an opinion.

So, Income account has Franked, Unfranked (from Bank) and Franking Credit
(from Asset). I'm not sure how taxes should be accounted for but I have an
Expense:Tax:Personal account and normally get a refund which I put through
as a credit. I can see that should clear the [Asset] Franking Credit
account.

Let's see if the screenshot below comes through with a dividend for 100 MQG
shares:

[image: image.png]

btw, Google search isn't returning anything for Franking over the last
year:
https://www.google.ca/search?q=site:lists.gnucash.org/pipermail/gnucash-user
+franking&source=lnt&tbs=qdr:y&bih=1003

>
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Hi Flywire,

I think you're probably right that Franking Credits should be income, but
for my personal accounts, it doesn't matter.
I also tried searching for Franking Credits (including
site:lists.gnucash.org in the search string as recommended) but doesn't seem
to work. Strange...

Regards, Chris Good

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[GNC] Ineffective Mailing List Searching

[flywire]

I raised this issue because despite asking users to search the mailing
lists this demonstrates the provided searches have little value. I followed
mailing list search instructions -
https://lists.gnucash.org/mailman/listinfo/gnucash-user  (note Nabble is
inoperational and the only other search is Google.ca). I agree, that
search returns quite a few results - only 3 since 2013. Again, no results
are returned with a filter of the last year, despite Chris Good linking to
one from this month.

This mailing list runs on MailMan version 2.1.29 but MailMan V3 (released
many years ago) has a lot of new features including improved searching (and
replying). I raised MailMan V3 in April '20 for a different issue but it is
not a priority - https://bugs.gnucash.org/show_bug.cgi?id=797702#c4

> https://lists.gnucash.org/pipermail/gnucash-user/2021-August/097501.html
> Regarding your search: I get results from:
https://www.google.com/search?q=franking+site%3Agnucash.org
>
> I'm not sure why Google.ca would have different results, or whether my
broader site designation draws in more. Mind you, they're older than the
previous year, but this discussion has occurred.
>
>> https://lists.gnucash.org/pipermail/gnucash-user/2021-August/097500.html
>> btw, Google search isn't returning anything for Franking over the last
year:
https://www.google.ca/search?q=site:lists.gnucash.org/pipermail/gnucash-user+franking&source=lnt&tbs=qdr:ybih=1003

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Re: [GNC] Financial Account Structure for Australian Shares and ETFs

[davidcousens49]

flywire

The following has some information of the treatment of franking credits in the
hads of an investor.
https://www.insightaccounting.com.au/2017/03/share-dividend-income-franking-credits/

It would appear that generally they form a part of your taxble income but would
need to be recorded in a separate income account/category. 

If your assessed tax payable then the amount of the franking credit is deducted
from you assessed tax if it exceeds your franking credit totals and if your
assessed tax is less than the total of your franking credits, then you may be
entitled to a refund of the difference between your franking credit total and
your assessed tax payable if you ar eligible.
https://www.ato.gov.au/Individuals/Investments-and-assets/in-detail/investing-in-shares/refunding-franking-credits---individuals/?page=2#:~:text=Total%20franking%20credits%20entitlement%20of%20%245%2C000%20or%20more&text=To%20be%20eligible%20for%20a,day%20of%20acquisition%20or%20disposal).

If you are not eligible then you do not need to gross up your income by the
amount of the franking tax credits. It would generally be wise to record the
franking tax credits in a separate taxable income account in any case, then at
tax time make the decision as to whether you are entitled to the tax credit
dpending on whether you meet the requirements below.

I personally use an appropriately named asset account as the second account for
the transactions recording the receipt of franking credits and at tax time would
zero that account (credit it) in reducing the tax payable liability (debit this
account) or in determining the tax refund if you are eligible. (I am normally
eligible).

If you are not eligible under the above provisions at tax time, then you do not
have to include the franking tax credits as part of your income, in which case
you would add a reversing transaction to the transactions recordinmg the
franking credits, zeroing the asset account and the franking credit income
account annotated accordingly.

This is my personal approach to recording franking credits but should not be
interpreted as accounting advice. If in any doubt consult an accountant.

David Cousens







On Thu, 2021-08-26 at 23:37 +1000, flywire wrote:
> The guide leaves stock and mutual fund financial account structure very
> open and search only showed one Franking/Franked thread in the recent past.
> I'm wondering what people do in practice.
> 
> Share dividends looks doable: Bank deposit = Unfranked + Franked - Tax
> Withheld. Franked has unpaid Franking Credits. Where does the contra
> account for Franking Credits sit? (I use a fairly simple account tree.)
> 
> ETFs: have about 10 tax codes that don't bear much resemblance to actual
> payments. How do people handle these? (I realise financial records only go
> so far preparing for tax. It's looking like a spreadsheet.)
> 
> I'm not looking at tracking physical shares/ETFs in GnuCash.
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Re: [GNC] Financial Account Structure for Australian Shares and EFTs

[Liz Dodd]

On Sat, 28 Aug 2021 17:50:53 +1000
"Chris Good"  wrote:

> Hi Flywire,
> 
> I think you're probably right that Franking Credits should be income,
> but for my personal accounts, it doesn't matter.
> I also tried searching for Franking Credits (including
> site:lists.gnucash.org in the search string as recommended) but
> doesn't seem to work. Strange...
> 
> Regards, Chris Good

Currently in Au they are subtracted from taxable income, but this is a
political decision, where logic is not required.
Because its a political decision any account tree needs to be capable
of being revised when some other group runs the country.

Liz
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