17 December 2024

    Fair Dividend Rate

    Calculating tax on foreign currency hedging of international shares

    Fisher Funds is now using the Fair Dividend Rate (FDR) method to calculate taxable income for foreign currency hedging of international shares in our wholesale international equity funds that are eligible to apply this method. The FDR method applies to calculate taxable income for foreign currency hedging of Australian ASX-listed shares and other international shares.

    Why it’s beneficial

    1. It reduces fluctuations in Portfolio Investment Entity (PIE) taxes due to movements in foreign currency valuations.

    2. It ensures the tax treatment of the foreign currency hedges is the same as the tax treatment of the fund's assets. This makes the currency hedging effective after tax.

    If you have any questions about the Fair Dividend Rate, please contact our team – we’ll be happy to help.