Making the most out of your Sharesight subscription at EOFY

Getting your shares loaded into Sharesight is a great start. But with the end of financial year fast approaching, it’s time to start thinking about your tax reporting requirements. Here are the specific tax reporting features within Sharesight that will save you time, money and admin-related headaches this EOFY.

Making the most out of your Sharesight subscription at EOFY

To start-off, we’ve prepared a special video to highlight Sharesight’s EOFY tax reporting features:


Here are the specific features you’ll want to take advantage of this EOFY:

1. Run tax reports in 1-click

While Sharesight’s performance reports provide insights throughout the year, our Taxable Income, Capital Gains (CGT), and Historical Cost reports are are indispensable to DIY investors at EOFY:

  • Save potentially thousands of dollars in accounting fees (including hundreds spent on CGT reports alone) by running your own tax reports.
  • Capture all your dividends automatically in one place. The Taxable Income report lets you break down dividends and franking credits over any time period. Sharesight also organises local, foreign, and income from trusts like ETFs.
  • Model the impact of unrealised capital gains in your portfolio and the resulting impact on your tax liability with the Unrealised Capital Gains Tax report. If you’ve taken some losses this year, our reports help you work out how to offset your gains. Available exclusively to upgraded Sharesight plan holders, this is a handy way to take advantage of tax time.

For $25 per month I was given back about 15 hours of my life usually devoted to manually calculating CGT.”

Stephen Colman, Sharesight customer

2. Track your investing costs & income with Xero

If you’ve been manually tracking all your investing-related costs and income in a spreadsheet all these years, then you’ll want to check out our award-winning integration with leading online accounting system Xero:

  • Automatically send details of your share purchases, sales, and dividends to Xero, so they can be easily reconciled against your bank statement and included in your financial accounts.
  • Link to an existing Xero account by upgrading your Sharesight plan or add Xero Cashbook as an add-on to your upgraded Sharesight subscription for only $15/month. Or better yet, if your accountant uses Xero, have them do it on your behalf.

3. Share portfolio access

Another handy tax-time feature is the ability to share your portfolio. Rather than printing-out and forwarding your Sharesight reports, why not:

  • Provide access for your accountant or financial advisor. With all your portfolio data in one place (including your tax reports), they’ll have everything they need to prepare your tax documents.
  • Save time by no longer having to gather paperwork for your financial professional(s), and save money because they’ll have everything they need to work quickly and efficiently.
  • Available exclusively to upgraded subscribers, this feature ensures everyone’s on the same page and can focus on what really matters – not just at tax-time but throughout the year.

4. Get personal assistance

Get personalised email support by upgrading your Sharesight subscription. While our Help Documentation, YouTube videos and Community Forum are designed to help you make the most of Sharesight features, you’ll appreciate the ability to email us when you need extra assistance.

5. Save money and claim your subscription

Claim next year’s membership fee on this year’s tax return by upgrading to to a paid plan before EOFY*. And as a bonus, when you pre-pay for an annual subscription, you get 1 month FREE!

Try before you buy

Still not sure if an upgraded plan is for you? Then why not try an upgraded Sharesight subscription risk-free for 30 days?** After providing your credit card details, you’ll INSTANTLY have access to all the features listed above, including FREE email support if you have any questions. And if you decide that an upgraded subscription is not for you, simply downgrade back to your Free plan – no questions asked!

* If you derive income from the sharemarket, your Sharesight subscription may be tax deductible. Check with your accountant for details.
** 30-day free trial of an upgraded Sharesight plan is a one-time offer.

How I manage my SMSF with Sharesight

Our support team gets many enquiries about how to best set up a super fund in Sharesight, so I thought I would share my own setup.

Besides being a shareholder and Executive Director of Sharesight, I, like many of you, have a self-managed super fund. It’s a pretty typical SMSF, with a corporate trustee and 2 members – myself and my wife. I manage the whole thing in Sharesight and Xero. I do the bulk of it myself and then get audit and tax help from my accountant at year end. It’s a very streamlined process. It costs very little to administer and takes very little admin time. The bulk of my time is spent on deciding how to best invest the fund, as it should be.

The Sharesight side

We are both still working full time and saving as much as possible into the fund. The bulk of the investments are in direct equities, a sizeable allocation to ETFs, both Australian and international, and a handful of managed funds.

All the assets are tracked in Sharesight and that is my primary management tool for the portfolio.

All buy and sell transactions are recorded in Sharesight using the broker import feature. Managed fund transactions (of which there are very few) are entered manually at this stage and I attach a pdf of the confirmation to the trade. Distribution and dividends are all handled through Sharesight.

We maintain one portfolio in Sharesight for the SMSF. The allocation to the member accounts is done in Xero at year end. From an investment point of view it is treated as one portfolio with one investment strategy.

How I manage my SMSF with Sharesight

Xero

I use Xero to reconcile all the transactions against the SMSF bank account. It’s very easy in Xero and ensures that the data is correct in Sharesight and that nothing has been missed.

Contributions from our employers and any non-concessional contributions are recorded from the bank statement in Xero as they are received.

Xero is also used to produce the annual accounts that are required. Because everything is reconciled along the way there is very little to do at year end before I hand over things to my accountant to review and complete. My accountant has access to the Xero ledger and makes all adjustments and year end entries into Xero.

The main entries required at year usually relate to revaluing the portfolio to the year market value This is determined from the Sharesight portfolio value at 30 June. Our accountant allocates all profit or loss to each member account based our individual contributions and a pro- rata allocation of the fund’s investment profit.

Chart of accounts

The chart of accounts I use in Xero contains all the detail needed for produce the annual accounts. It also contains the member accounts. One of the benefits to using Sharesight and Xero is that the chart in Xero can be relatively simple. It’s not necessary to maintain a lot of detail for individual securities because all of that is kept in Sharesight. Our support team can provide a sample Chart of Accounts if you are interested

Audit

I maintain a Dropbox folder that my accountant has access to that has copies of anything the auditor might need to review, including bank statements, dividend confirmations, etc. I try and attach all dividend notices to the Sharesight-generated dividends as a record but there is also a copy in Dropbox.

Tax

My accountant prepares the tax return from the information in Xero and Sharesight. At this stage she is using a third party tax software so there is some rekeying of the summary data into the tax return software but this is not a big exercise. Going forward she may be able to use the Xero tax return engine which will reduce or eliminate this step altogether.

Investment strategy

Trustees are required to document the investment strategy of the SMSF each year. Typically, this is a pretty bland and generic document that is prepared by the accountant and simply highlights the asset allocation (e.g. the split between equities, fixed interest, international shares). With Sharesight you can make this a more useful and dynamic tool to monitor your investments. The basic report for compliance is prepared as a word doc and updated with the allocations from Sharesight. The reality, however is that Sharesight is really your investment strategy tool. The new custom groups feature will make this even more useful as it is now possible to create reports in Sharesight that will exactly map your desired asset allocation and investment strategy.

I hope this is a useful summary of how you can use Sharesight to run your super fund. It should go without saying that you should consult with your accountant when you do use Sharesight for your SMSF. The compliance obligations are stricter than most other investment entities and you want to make sure you get yours set up properly.

Important Disclaimer: The opinions expressed here are the author’s alone and should not be taken as advice. Sharesight does not provide financial advice.

FURTHER INFORMATION

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Asset Allocation Reporting in Sharesight

In the TV show The Sopranos, Tony tells his wife Carmela not to worry because he’s “got his money tied up in asset allocation.” One could see why Carmela might be concerned about her family’s financial future given her husband’s line of work.

In reality, all investors have their money allocated in some form or another. Tony’s happened to be in large bills, hidden in bird seed in his back yard (not recommended in an inflationary environment). It’s wise to understand to what areas of the economy your money is exposed. What happens when stock markets perform well? What happens when the price of oil falls? How about interest rates? All of these macro and micro forces affect different parts of your portfolio in different ways.

Asset Allocation Reporting in Sharesight

The ultimate goal is to build a portfolio that’s diversified based on your personal situation. If you’re young, you’ll want to favour riskier growth assets because you can afford short term losses. If you’re nearing retirement, an asset mix towards cash and defensive holdings makes sense as you prepare to draw down your portfolio in retirement.

We designed our new Custom Groups feature with asset allocation reporting in mind. The challenge we faced though, was that customers define asset allocation in many ways. Some prefer a basic breakdown, others want more granularity. Furthermore, asset allocation looks different based on what country you’re investing from and what types of securities you can access.

Research has shown that asset allocation does matter. The academics at Ibbotson (now Morningstar) and the University of Chicago did some of the original work in this area. The Importance of Asset Allocation and Asset Allocation is King are good primers.

How To: Asset Allocation Reporting in Sharesight

Even if you’re a stock picker, you’re probably making investment decisions with some respect to the overarching asset class the company belongs to.

Our Custom Groups feature lets you plug in any asset allocation methodology you prefer or create your own. If you’re new to asset allocation, our encouragement would be to start by classifying your portfolio based on areas of the economy that are typically decoupled:

Style Investment Example Risk Description
Growth Equities High Listed companies that may perform well long-term, but prone to volatility
Defensive Bonds Low Interest-bearing, highly rated government bonds or corporate debt
Balanced Funds, Hybrids Medium Managed funds that invest in growth and defensive assets, or listed hybrids
Cash Term Deposits Low Liquid cash that can be accessed at any time, such as a savings account
Alternatives Derivatives, Commodities High* Range of synthetic investments designed for specific exposure or tactics

*Typically alternatives are riskier than other asset classes, although an alternative could well and truly be any non-traditional type of asset.

On the Custom Groups page, begin by giving your grouping a name. Basic Asset Classes, for example. Then, create your categories. Remember you can create more than one top-level grouping if you want to get more granular later.

Asset Allocation Reporting in Sharesight

Once finished categorising, check out the Diversity Report and ensure you view the report using your custom groupings. This will show you a current breakdown of your asset allocation.

Asset Allocation Reporting in Sharesight

Also check your Performance Report. Since each section of the report displays a sub-total this allows you to compare the performance of each asset class, which is critical when deciding how to rebalance your portfolio.

Asset Allocation Reporting in Sharesight

The above example is only a basic start. Many investors will want to break down each category into several sub-categories (equity style, for example), which is also easy to do with Custom Groups.

FURTHER INFORMATION

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How to handle the NAB renounceable rights offer

In early 2015, NAB announced that it would be undertaking an accelerated Renounceable Entitlement Offer, in order to raise roughly $5.5 billion in capital. The offer gave eligible retail NAB shareholders to right to purchase 2 NAB shares, at an issue price of $28.50, for every 25 NAB shares they held.

Eligible NAB shareholders had the options of either:

  • Taking up the offer, meaning they could purchase X number of NAB shares (based on what their entitlement was) at the issue price of $28.50.
  • Selling their rights (or even purchase more) on the rights market, under the code NABR.ASX.
  • Doing nothing and having NAB sell their entitlements through a retail bookbuild process.

Whichever option you chose at the time, Sharesight allows you to easily account for this within your portfolio.

NAB Renounceable Rights Offer

Please note that we always advise you to consult your financial advisor or accountant regarding corporate actions, especially for tax purposes, as we are not authorised to provide financial advice. The information below, including the dates is subject to change. We encourage you to review the offical Nab Retail Entitlement Offer document for full details.

Follow these steps to handle the NAB renounceable rights offer in Sharesight:

Taking up your entitlement offer

If you decided to take up the offer, you simply need to enter a new Buy transaction within your NAB holding, as follows.

  1. Firstly, navigate to your NAB holding from the ‘Overview’ page. Within the ‘All Trades and Adjustments’ section, click on ‘Enter a new Trade or Adjustment’.
  2. Enter the trade date as 11/06/2015 (issue date of the new shares). The share purchase price will be $28.50 (the offer issue price). You can enter a comment explaining this purchase was part of the offer.
    NAB Renounceable Rights Offer #1

Selling your entitlements on market

If you decided to sell your rights/entitlements on market, you will need to add a holding under the code NABR (rights code) and then enter a Sell transaction against it.

  1. Firstly, to add the holding, from the ‘Overview’ page click ‘Add or Import Holdings’.NAB Renounceable Rights Offer #2
  2. Using a ‘Buy’ trade, enter the code NABR ( ASX), and ‘Trade Date’ as 09/05/2015. The quantity will be your NAB quantity divided by 25, then multiplied by 2. For example, if you hold 1000 NAB shares – (1000 / 25) x 2 = 80. Share price will be $0. Note – you can return to this transaction at a later stage to enter a comment.
    NAB Renounceable Rights Offer #3
  3. Once you’ve saved this new holding, you will be taken to the ‘Overview’ page, where you should now be able to see your new holding NABR. Clicking on the new holding you will be taken to the ‘Holding’ page for NABR.
  4. From the ‘Holding’ page, under the ‘All Trades and Adjustments’ section, click ‘Enter a new Trade or Adjustment’. In this new window, change the ‘Type’ to Sell, enter the trade date, full (or partial if applicable) quantity, Sell price and comments (if applicable). For some of this information, you may need to refer to your contract note or brokerage account. You can also upload any related contract note for future reference.
    NAB Renounceable Rights Offer #4

If your entitlements were sold through the bookbuild process

(i.e. no action)

If you decided to do nothing and allowed NAB to attempt to sell your entitlements through a retail bookbuild process, you would have likely received a nice little payment of $3.10 per entitlement. The best way to account for this would be to create a new ‘unfranked’ dividend payment for your NAB holding.

To do so, from the ‘Overview’, click into your NAB holding. On the NAB ‘Holding’ page, scroll down to the ‘All Income’ section and click ‘Enter a new Dividend’. In this new window, per your Payment Summary document received directly from NAB, enter the amount you received into the ‘Unfranked Income’ section. If you do not have your Payment Summary, you can use – Entitlement Quantity x $3.10 = payment received.
Note – Figure of $3.10 per entitlement was obtained from NAB and other research sources. It is always best to refer to your Payment Summary for exact amounts.

NAB Renounceable Rights Offer #5

For most investors these corporate actions can be time consuming and confusing. Sharesight provides you with the tools and technology to help keep your portfolio up to date. Remember to check our customer forum to interact with other investors and learn how they approach these issues.

FURTHER INFORMATION

Sharesight Help — Renounceable Rights

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Announcing Custom Groups

The lens through which an investor views their portfolio varies based on their objectives, investment philosophy, and even where they live. That’s why we’ve built a new feature that allows clients to fully customise how their portfolio holdings are grouped.

Custom Groups - Sharesight

Custom Groups is a user-driven option and is available in addition to the standard Market, Country, Sector, Industry, and Investment Type options.

You’ll find Custom Groups within Account Settings > My Custom Groups:

Custom Groups #1 - Sharesight

Custom Groups #2 - Sharesight

Once you’ve customised your groups we recommend applying them to the Portfolio Overview and Performance Report pages:

Custom Groups #3 - Sharesight

And definitely the Diversity Report, which will show you asset allocation on your terms:

Custom Groups #4 - Sharesight

FURTHER INFORMATION

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Track up to 10 holdings, FREE for life!

Need to manage client portfolios? Signup to Sharesight Pro