Tax on dividends and capital gains

Could you please advise on the tax treatment of dividends and capital gains if an SMSF (in pension phase) invests in either:

  • direct purchase of overseas shares or;
  • managed funds investing in overseas shares

A: Thanks for the question.


If the fund is in pension phase, then no tax is payable.


Accordingly, there is no Australia tax to pay on any income or capital gains on the offshore investments you have described.


One small caveat – if withholding tax is levied by a foreign government on the investment’s income (for example, by the US Department of Inland Revenue – typically at 15%), you won’t receive any refund/rebate back from ATO as your fund won’t have paid any Australian tax.



Read Answer