High Cost Base Adjustments Signal Complex Tax Impact for HQUS Investors
Betashares Capital Ltd has released the estimated annual distribution breakdown for its S&P 500 Equal Weight Currency Hedged ETF (ASX, HQUS), highlighting a substantial 317% attributed distribution for the 2024-25 financial year.
- Estimated total attributed distribution of 317.13%
- 100% estimated cash distribution payout
- Significant foreign income component at 35.59%
- Notable capital gains non-taxable Australian property at 124.60%
- AMIT cost base decrease adjustment of -208.96%
Overview of Distribution Components
Betashares Capital Ltd has announced the estimated annual distribution components for its Betashares S&P 500 Equal Weight Currency Hedged ETF (ASX, HQUS) for the financial year ending 30 June 2025. The breakdown reveals a complex mix of income types, tax offsets, and capital gains, culminating in an estimated attributed distribution of 317.13% relative to the cash paid out.
Income and Capital Gains Breakdown
The distribution is predominantly driven by foreign sourced income, which accounts for approximately 35.59% of the total. Australian income components, such as interest and dividends, are minimal or zero, reflecting the fund’s overseas investment focus. Notably, capital gains from non-taxable Australian property represent a significant 124.60%, with an additional 23.91% from other capital gains methods, underscoring the fund’s realized gains strategy within Australian property assets.
Tax Offsets and Adjustments
Tax offsets include a foreign income tax offset of 8.17%, while franking credits remain at zero, consistent with the fund’s international exposure. The announcement also details an AMIT (Attribution Managed Investment Trust) cost base decrease adjustment of -208.96%, a notable figure that may affect investors’ cost bases and tax positions. These adjustments reflect the fund’s compliance with the AMIT tax regime and highlight the complexity of tax reporting for investors.
Cash Distribution and Investor Implications
Despite the high attributed distribution percentage, the estimated cash distribution is 100%, indicating that investors will receive a full cash payout relative to their units. The difference between the attributed and cash distributions is managed through cost base adjustments, which investors should carefully consider for tax planning. Betashares advises investors to consult the forthcoming AMMA statement for final tax component details and to seek professional advice to understand the implications fully.
Looking Ahead
This detailed disclosure underscores the fund’s transparent approach to distribution reporting and tax compliance. As the financial year progresses, investors and analysts will be watching closely for the final AMMA statement and any market reactions to these substantial distribution figures.
Bottom Line?
Investors should prepare for complex tax implications as Betashares HQUS delivers a hefty attributed distribution with significant cost base adjustments.
Questions in the middle?
- How will the large AMIT cost base decrease impact investor tax liabilities?
- What factors contributed to the unusually high capital gains from non-taxable Australian property?
- Will the final AMMA statement confirm these estimated distribution components or reveal adjustments?
