Currency Shift Clouds Net Dividend Returns for ResMed ASX Investors

Dividend Update and FX Rate Revision

ResMed Inc, a global leader in medical devices, has issued an update to the foreign exchange rate applied to its forthcoming dividend payment for holders of its Chess Depositary Instruments (CDIs) listed on the Australian Securities Exchange (ASX). The dividend, declared at USD 0.053 per share for the quarter ending March 31, 2025, will now be converted at an updated rate of 0.6400 US dollars per Australian dollar.

This adjustment means that Australian investors will receive a dividend payment of AUD 0.0828 per CDI, reflecting the 10:1 ratio between CDIs and underlying NYSE shares. The payment date remains set for June 12, 2025, with the record date on May 8, 2025.

Tax Implications for Australian Investors

The dividend is unfranked, meaning it carries no Australian franking credits, and is subject to US withholding tax. By default, a 30% withholding tax applies to dividends paid to Australian residents. However, under the existing US-Australia tax treaty, this rate can be halved to 15% if investors submit the appropriate documentation, such as Form W-8BEN or W-8BEN-E, to ResMed's Australian share registry, Computershare Investor Services Pty Limited.

This tax treaty benefit is significant for Australian investors seeking to maximise their dividend income, but it requires proactive compliance with the necessary paperwork.

Context and Market Considerations

ResMed’s update follows its initial dividend announcement on April 24, 2025, and reflects the company’s commitment to transparency regarding currency fluctuations that affect Australian investors. While the dividend amount in US dollars remains unchanged, the revised exchange rate impacts the Australian dollar equivalent, which can influence investor sentiment and portfolio income expectations.

Given the unfranked nature of the dividend and the withholding tax considerations, investors will need to carefully assess their net returns. The update also underscores the importance of currency risk management for holders of foreign-listed securities trading on the ASX.

As the payment date approaches, market participants will be watching for any further adjustments or clarifications from ResMed, especially in light of ongoing currency volatility and evolving tax compliance requirements.