
Taxation
Taxation
1. How are investors taxed?
Generally, each Fund will pay distributions to investors at least once per year, unless the Fund had made a loss in that year. This loss cannot be distributed to investors. Instead, it can be carried forward and used to reduce the Fund’s assessable income in a later year. Distributions comprise of interest, dividends, capital gains, profits on shorting, etc. The intention of each Fund is to distribute all of its assessable income to investors each year.
Invesco will then provide an annual taxation statement to investors advising both the amounts attributed and the components of the distribution for tax reporting purposes. When you fully or partially withdraw units from the Fund, this is treated as a disposal of your investment and you may be subject to capital gains tax. You may also be attributed to your share of income derived by the Fund for the period leading up to your redemption and also attributed any gains that the Fund makes to fund your redemption request.
Income earned by the Fund from investments outside Australia may be subject to taxation in the country where the income is sourced. For their share of foreign tax paid an Australian resident investor may be able to claim a foreign income tax offset against their Australian tax liability.
Investing in a registered managed investment scheme is likely to have tax consequences. We strongly recommend that you seek professional tax advice before investing in an Invesco Fund.
2. What do we mean by 'acquisition and disposal of units'?
Under the Capital Gains Tax ('CGT') provisions, when a investor disposes of their units, whether by withdrawing, switching or transferring units, they may be liable to pay tax on any realised gain.
3. What is the tax position of Invesco Funds?
An Invesco Fund should not pay tax on the basis that all of its taxable income will be distributed to investors. Investors will be assessed for tax based on the attributed share of the Fund’s taxable income and any capital gains generated by the Fund. The taxable sum of these components may differ to the amount of cash distribution an investor receives.
Distributions from the Fund may entitle investors to franking credits and/or foreign income tax offset. Distributions may also include tax deferred amounts or return of capital amounts which may reduce the cost base of your investment for CGT purposes.