I'm looking through my previous tax returns, and noted that distributions from ETFs that I earn are offsetting certain Capital Losses that I've incured during the financial year. I initially thought (potentially incorrectly) that ETF distributions are only taxed as income, or are they also considered CGT events? Thanks.
You would need to check the distribution if you have received capital gains. If there's capital gains in the distribution then yes, unused capital losses would be used to offset it.
I initially thought (potentially incorrectly) that ETF distributions are only taxed as income
Following on from the comments made by @YellowPotato , the answer to the question "income or CGT events" is generally considered to be "both".
ETFs, in a similar way to any managed fund, are generally obliged to return capital gains and losses to shareholders, so these will be included in your annual statement as, for example, gains eligible for discount, gains not eligible for discount and losses. You can also have income. The statement should tell you which amount to include in each question of the annual return to the ATO.
15 Apr 2026 · 8 min read time
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