I believe that generally fully franked ETFs do not pay the 30% Corporate tax rate like say Telstra, also fully franked. Instead individual investors must declare such untaxed ETF dividends in their tax own return. So, does that mean that the Vanguard Australian Shares High Yield ETF (VHY) estimated fully franked dividend of about 4.3% is in fact more like 3% (assuming I pay 30% tax).
A: I would assume that the yield to you is 4.3%, and there will be franking credits on top.
Trusts (such as ETFs) act as “pass through” vehicles. They don’t pay any tax, but will pass through to you any income they receive, and any tax benefits that go with the income. When you receive it, it is taxable in your hands.
