Prepare the imputation credit account

Modified on Fri, 28 Mar at 3:00 PM

Overview

The imputation credit account (ICA) workpaper is automatically populated based on data from other workpapers in TaxLab, and imported transactions from IR. Other transactions can be added manually to the workpaper. The workpaper keeps a running balance of the imputation credit account, and flows directly into the IR4J for automated completing and filing each year.

Accessing the workpaper

From the entity's tax year summary select Workpapers > Imputation Credit Account.

By default, the workpaper is on for all company entity types. To turn the ICA workpaper off or on:

From the entity's tax year summary, select the three ellipses, found in the top right of the navigation bar.
Select Settings.
Scroll down to the Return Settings section.
From the Imputation Credit Account drop-down list, select No or Yes.

Add an imputation credit account transaction

Some transactions will appear in the ICA automatically. If you have transactions entered as tax payments, then these will automatically appear in the ICA. Certain workpapers added to accounts in your trial balance contain fields which will also auto-populate. Any imputation credits and resident withholding tax (RWT) credits recorded on the following workpapers flow through based on the date of the transaction from:

Dividend income
Interest income

Transactions can also be manually added to the ICA (such as shareholder continuity change, dividends paid, etc.):

From the entity's tax year summary select Workpapers > Imputation Credit Account.
Select New which will open a popup.
Under Date, add the date the transaction occurred. There are 5 dates which can be added, and as a default these will all populate with the date entered in Effective. You can edit the dates independently of each other to correctly account for your transaction.
Under Transaction, select the relevant transaction type.
Under Debit (Credit), enter the amount on the transaction.
The Tax return section of the popup allows you to select if the transaction is still pending with IR. Applied as Tax Paid and Impact UOMI are only active if the transaction has come through the IR integration.
The Tax provision section allows you to indicate whether the transaction impacts tax proof or tax account movements. These will only be active if the transaction has come through the IR integration.
The Imputation Credit Account section allows you to select whether the transaction impacts the ICA. This can only be deselected if the transaction has come through the IR integration. You can also select whether the transaction should be kept in a consolidated tax group member's ICA, if the entity is part of an ICA group. The dropdown below this shows the section of the IR4J return that the transaction will be disclosed in. This is automatically populated depending on the transaction type selected above, but can be edited.
Optional: add a Note.
Select Save.

Using the workpaper in the first year

If this is your first year using the software, record the opening balance as part of the prior year so that it is disclosed as an opening balance on the tax return.

From the entity's tax year summary select Workpapers > Imputation Credit Account.
Select New to access a popup to add a new transaction.
Under Date, update the date to the end of the last imputation year.
Under Transaction, select Historic ICA balance.
Under Debit (Credit), enter the amount
Optional: add a Note.
Select Save.

Remove an imputation credit account transaction

Transactions can either be deleted, or marked as not impacting the ICA. This is useful if the transaction showing in the account is one that is from the IR integration, and you do not wish to delete it. To delete a transaction:

From the entity's tax year summary select Workpapers > Imputation Credit Account.
From the Imputation credit account workpaper locate the transaction you want to delete.
Select the transaction to open it.
Select Delete.

Workpaper navigation

Global navigation

The New button creates a new transaction in the ICA.
The workpaper contents can be exported to excel by selecting Export.

The Format dropdown allows you to select the format to display the workpaper in. You can choose from Return (default), FIFO or Annual ICA Return. Selecting Annual ICA Return formats the ICA to display the transactions in their IR4J categories.

The Tax year dropdown allows you to filter by each year (and shows you the total transactions in that year), or to view all years and transactions. The arrows allow you to toggle forwards and backwards between years.

ICA year transactions navigation

The ICA Date and Effective date columns display the dates at which transactions have been recorded.
The Transaction column displays what the transaction was for.
For Return or FIFO formats, the Debit, (Credit) and Balance columns show you to value of each transaction, and a running balance.
For Annual ICA formats, the remaining column headings display the categorisation of the transaction in the IR4J, and the Closing column displays the total of that row. The FDP columns refer to the foreign dividend payment regime, which is not relevant for tax years later than 2018.
The tickbox allows you to select and reclassify multiple transactions.
The arrows icon in the Effective column indicates whether the date is the same as the ICA Date column. If the dates differ, the arrows icon will change style and colour, from light to dark grey.
The speech bubble icon indicates whether a note has been added to the transaction or underlying workpaper, and if so, will turn from light grey to blue.

Selecting the settings icon next to a transaction allows you to edit, highlight, mark the transaction as "Always keep in the consolidated tax group Member ICA" or delete it. "Impacts the ICA" is ticked by default for all transactions, and will only be active to untick if the transaction has come through the IR integration.

Entities with non-standard balance dates

If an entity has a non-standard balance date and the imputation credits or RWT need to be split into amounts received before 31 March and amounts received after 1 April for imputation credit account purposes, add a breakdown to the income account. In the breakdown, split it into two items being “Income received before 31 March” and “Income received after 1 April” and allocate the income accordingly. On each line, add a workpaper, enter the relevant tax year date, and populate the workpapers with the credits. These will now be reflected in the correct year’s imputation credit account based on the date paid in each workpaper.