Investors Face Tax Complexity as Betashares HGBL Reports Large AMIT Cost Base Decrease

• Estimated total attributed distribution exceeds 189%
• Foreign sourced income dominates at over 63%
• Significant non-assessable capital gains component at 46%
• Estimated cash distribution set at 100%
• Notable AMIT cost base decrease of nearly 81%

Overview of Distribution Components

Betashares Capital Ltd has provided a detailed breakdown of the estimated annual distribution components for its Betashares Global Shares Currency Hedged ETF (ASX, HGBL) for the financial year ending 30 June 2025. This disclosure is critical for investors as it outlines the tax attributes of distributions, which directly impact tax reporting and investment returns.

The total estimated attributed distribution stands at an eye-catching 189.8383% of the cash paid, reflecting the complex nature of the fund's income sources and tax treatments under the Attribution Managed Investment Trust (AMIT) regime.

Dominance of Foreign Income and Capital Gains

The distribution is heavily weighted towards foreign sourced income, which accounts for approximately 63.14% of the total. This aligns with the fund’s global equity exposure, currency hedged to mitigate foreign exchange risk for Australian investors. Additionally, capital gains classified as non-taxable Australian property contribute a substantial 46.05%, further emphasizing the fund’s strategy of generating returns through asset appreciation.

Interestingly, the fund reports no significant Australian income from dividends or interest, underscoring its international investment focus. The absence of franked dividends and minimal Australian interest income suggests that the fund’s yield is primarily derived from overseas equities and capital gains rather than domestic income streams.

Tax Offsets and Adjustments Under AMIT

The announcement also highlights tax offsets including a foreign income tax offset of 8.87% and a minor Australian franking credit from a New Zealand franking company. These offsets can provide some tax relief to investors, depending on their individual circumstances.

Notably, the fund reports an AMIT cost base decrease of 80.97%, a significant adjustment that investors should consider as it affects the cost base of units held and may influence capital gains tax calculations upon disposal.

Implications for Investors

While the estimated cash distribution is 100%, the disparity between cash paid and attributed taxable income highlights the complexities of the AMIT tax regime. Investors should anticipate receiving a detailed AMMA statement for precise tax reporting. The detailed breakdown assists investors and tax advisors in navigating the tax implications of holding units in the HGBL ETF.

Betashares reminds investors that units trade on the ASX at market prices, which may differ from the net asset value, and that past performance is not indicative of future results. The fund’s global focus and currency hedging strategy continue to position it as a sophisticated option for investors seeking international equity exposure with currency risk management.

Bottom Line?

As the final AMMA statement approaches, investors should prepare for nuanced tax reporting and consider the impact of significant cost base adjustments on their portfolios.

Questions in the middle?

• How will the substantial AMIT cost base decrease affect investors’ future capital gains tax liabilities?
• What portion of the foreign income is expected to be subject to withholding taxes impacting net returns?
• Will the fund’s distribution components shift significantly if global market conditions change in FY2026?