Tax rate calculation method

The purpose of this functionality is to select the tax rate calculation method at an Entity level on recurring withdrawals/annuity payments.
 
The following Tax Rate Calculations options are available:

• Tax Table (this default will apply if no tax calculation method is set up) – this option takes past and future income into consideration when calculating tax.
• Effective Tax Rate – this option is applied when a client has a fixed tax rate and past and future income is also taken into consideration when calculating tax.
• Percentage of Monthly Income – this option calculates tax as a fixed percentage on the monthly income.

NOTE: The Tax rate calculation method can be overridden on a contract level in scenarios where the investor has multiple Living Annuity contracts. See ‘‘Enable override of tax rate calculation method on a contract’.

Steps to follow:

On entity level , on the “Personal Details” card of the investor select the (1) More Actions and then select (2) Tax Details.

By default the “Tax rate calculation method” is set to use the tax tables that are loaded in the system.

To change the Tax rate calculation method to “Effective tax rate” method, select this from the drop down list and capture the effective percentage required.

To change the Tax rate calculation method to “Percentage of Monthly Income” method, select this from the drop down list and capture the percentage required.

To apply these changes, Save (green check) to close the “Tax Details” section.
 
NOTE:
If the Effective Tax Rate or the Percentage of Monthly Income is 0.00%, a pop up will appear on screen, requesting the user to confirm the 0.00% before they are able to save the details.
 

Enable override of tax rate calculation method on a contract

You have the option to override the Tax rate calculation method in the event the investor has multiple Living Annuity contracts where different tax rates may be applicable.
 
Steps to follow:

On the “Contract Details” card , select the (1) More Actions and then select (2) Override tax rate calculation details.

By default the ‘Override tax rate calculation details’ checkbox is deselected.

Once the ‘Override tax rate calculation details’ checkbox is selected, you are able to select the ‘Tax rate calculation method’ for the contract.

Last Updated on 2 weeks ago by Jamie Chinsamy