Tax Expense Based Expense Rule Calculation Example

You can use a Ledger Activity type adjusted NAV expense rule to set up a tax expense based expense. The tax expense accrual is based on the activity for a given ledger account range that you select in the adjusted NAV expense rule. The system can calculate ledger activity at the total fund or class level. Class level tax expense accruals can have different rates for each class.

Sample Adjusted NAV Expense Rule

The following table shows the sample adjusted NAV expense rule setup used in this example.

Tax Expense Calculation at Fund Level Example

Tax Expense = Tax Rate * Daily Ledger Activity

The following figure shows the variable expenses set up as tax expense based expenses. Each expense is set up at the total fund level. The FEE_VALUE column shows the rate for the expense.

Open

The following report shows the net activity for each expense account used in the example. 

Open

Interest Tax Inclusion Expense = 13.89 * 5% = .69

CGT (Realized) Tax Inclusion Expense = -10,000 * 22.4% = -2,240

Unrealized Tax Inclusion Expense = 5,748.37 * 22.4% = 1,287.63

Tax Expense Calculation at Class Level Example

Tax Expense = Tax Rate * Daily Ledger Activity

The following figure shows the variable expenses set up as tax expense based expenses. The expenses are set up at the total fund and share class level. The FEE_VALUE column shows the rate for the expense.

The following report shows the net activity for each expense account used in the example. 

Class A

Interest Tax Inclusion Expense = 1,350 * 28% = 378.00

CGT (Realized) Tax Inclusion Expense = 375 * 22.4% = 84.00

Unrealized Tax Inclusion Expense = 38,612.75 * 22.4% = 8,649.26

Class B

Interest Tax Inclusion Expense = 450 * 30% = 135.00

CGT (Realized) Tax Inclusion Expense = 125 * 12% = 15.00

Unrealized Tax Inclusion Expense = 12,870.93 * 12% = 1,544.51

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