Hi Navexa team,
Just wanting to point out a small quirk that I’m not sure if it’s been mentioned already?
With respect to end of financial year dividends from ETFs (i.e. VDHG), the Ex-dividend date is 01/07/2021 (Cum-dividend 30/06/21) and the payment date mid-July. This is reflected correctly when generating a taxable income report (attributed to FY20-21).
However, on the main portfolio view and the individual holding view, the dividend amount gets counted in “This Financial Year” - is this due to the payment date falling within the current financial year? Just wondering if these dates and reporting should be handled consistently?
I noticed this week similar problem in portfolio view and individual dividend dates, requesting consistency. Currently it causes mismatch in totals for a period from tax perspective - ex div date vs actual date
Hi @TSpec thanks for reaching out.
This is an interesting one as there is a difference between tax and performance.
One could argue that when you receive the dividend, that counts towards your performance as that is when you actually got paid.
However from a tax point of view the distribution date is what classifies the tax year it falls in.
I’m open to feedback here on what scenario covers most peoples use case the best.
Hi @Navarre the issue is also the type of entity paying … A trust structure (APA, TCL etc) will pay in August but it will relate to the prior tax year… IVV and other ETF’'s are similar …
From the tax perspective you have no real alternative but to include them in the appropriate tax year but from the performance view it depends on what your own policy is as long as its consistent from year to year.
If I had to pick only 1 then I would pick the tax solution over when the cash was received. As least it comes a consistent basis.
Yeah, can see the argument for including in the current financial year from a “performance” point of view as that’s when you actually got paid.
I guess the generated taxation report is accurate. I guess it depends on what your internal consistencies are and how you process it each time you look at your charts.
Could this be included as an “option” to select between the two for the purposes of performance tracking vs. taxation tracking? Not sure what the demand for this would be or how difficult it would be to code.
In portfolio view, for each security, income return is as per Date paid. If someone is picking up dividends from tax perspective, this may result in double counting - previous year vs current year, performance vs tax.