3.10.6 Authorize Amended UH Non Tax Limits Record

This topic provides the systematic instructions to authorize amended UH Non Tax Limits record.

1. When an amendment is made to a Non Tax limits record for a unit holder, it must be authorized for the information change to take effect in the system and for the resultant processes to be initiated.
2. When an amendment resulting from the unit holder’s Non Tax limit being brought down to zero (i.e., the unit holder has been made legally ineligible or the eligibility has been stopped or withdrawn) is being authorized, the system displays a message stating that the Non Taxable holdings of the unit holder will be converted to taxable holdings.
3. If the authorization is confirmed, the system triggers transactions that will convert the nontaxable units to taxable units. If any provisional holdings are present, the system forces the user to either confirm or reject the same. Redemptions will go through the normal taxation.
4. The Inheritance Process (Return of Death Status): In the event of the death of the unit holder for whom a Non Tax limit is in operation, you must specify the death, date of death and the receipt of the death certificate in the Non Tax limits record, through an amendment. The Date of death must be specified as mandatory information.
5. In the event of death of a unit holder with a Non Tax limits record, you must manually enter redemption transactions or transfer transactions, before you specify the return of death status in the Non Tax limits record. By this process, the Non Taxable units held by the deceased unit holder are either redeemed, or transferred to the account of the legal heir, through a normal transfer transaction. If transferred, the system checks for the Non Tax limit eligibility of the transferee unit holder. If the resulting transfer transaction exceeds the Non Tax limit specified for the transferee unit holder, the spillover balance is added to the transferee’s taxable holdings. Redemptions will go through the normal taxation.