This article explains how to record an ETF distribution that includes Return of Capital, so your taxable income and cost base are treated correctly in Navexa.
What Return Of Capital Means
Return of Capital, or ROC, is when part of your original investment is returned to you.
ROC is not treated as taxable income in Navexa. Instead, it reduces your cost base, which can affect your Capital Gains Tax (CGT) result when you sell the holding later.
In practical terms:
The taxable income portion stays in the Income tab.
The ROC portion is recorded as a Return of Capital trade.
The ROC trade reduces the holding’s cost base.
The ROC amount should not inflate your taxable income report.
Before You Start
Before recording ROC in Navexa, check your official ETF distribution statement, tax statement, broker tax summary, or fund provider breakdown.
You need to know:
the total distribution amount
the taxable income portion
the ROC portion
the ex-dividend date
the paid date
any foreign tax withheld, if relevant
For US ETFs, ROC may be shown as a nondividend distribution on tax documents or fund provider breakdowns.
Do not guess the ROC split. ROC affects cost base, so the statement or tax summary should be your source of truth.
Choose The Right Workflow
Use the workflow that matches the dividend or distribution fields you see in Navexa.
Trust-Style Distributions
Use the trust-style workflow if the dividend form shows Trust Income fields.
This is common for some Australian ETFs, trusts, and managed funds.
Standard Dividend Entries
Use the standard dividend workflow if the dividend form only shows fields like Net Payment and Foreign Tax Withheld/Offset, with no Trust Income section.
This is common for some US ETFs.
Step 1: Open The Distribution
To edit the ETF distribution:
Select Portfolio from the left-hand menu.
Select the ETF holding.
Open the Income tab.
Find the distribution you need to adjust.
Select the three dots next to the income entry.
Select Edit.
The Edit Dividend panel opens from the right-hand side of the screen.
Step 2: Edit The Income Entry
The income entry should only contain the taxable income portion of the distribution.
If You See Trust Income
If the form shows Trust Income, update the dividend fields so they only reflect the taxable portion.
Keep the original dates unless your statement shows different dates.
Complete the fields as follows:
Trust Income: Select Yes.
Ex-dividend date: Use the statement’s ex-dividend date.
Paid date: Use the statement’s paid date.
Franked Amount: Enter the franked taxable amount, or
0.Franking Credits: Enter the franking credits, or
0.Unfranked Amount: Enter the taxable unfranked amount, if applicable.
Notes: Add the ROC split and statement source.
Select Save Changes when finished.
If You Do Not See Trust Income
If the form does not show Trust Income, update the standard dividend fields so they only reflect the taxable portion.
Complete the fields as follows:
Net Payment: Enter the taxable net payment only.
Foreign Tax Withheld/Offset: Enter the withholding tax that applies to the taxable portion.
Ex-dividend date: Leave unchanged unless your statement shows a different date.
Paid date: Leave unchanged unless your statement shows a different date.
Notes: Add the ROC split and statement source.
Select Save Changes when finished.
Adjusting the withholding matters because Navexa calculates Gross Payment from the net payment and withholding fields. The gross payment should match the taxable income portion you are keeping in the income entry.
Step 3: Add The ROC Trade
After editing the income entry, record the ROC amount as a separate trade.
To add the ROC trade:
Open the holding.
Select the Trades tab.
Select Add Trade.
Set Trade Type to Return of Capital.
Use the same paid date as the distribution.
Enter the ROC amount.
Add a note with the statement source and ROC percentage.
Select Add Trade or Save.
The Return of Capital trade may appear as a negative amount in the trade list. This is intentional. It shows that capital has been returned to you and the holding’s cost base has been reduced.
Step 4: Check Your Reports
After saving both entries, check your reports.
The Taxable Income report should show only the taxable income portion of the distribution.
The Capital Gains Tax report should reflect the reduced cost base from the Return of Capital trade.
The portfolio performance view should remain logically consistent because you have split one distribution into its taxable and capital components.
Example: US ETF Without Trust Income
In this example, you hold 200 shares of MSTY.
The fund provider's website shows:
But here is the data in an easier to read format:
Detail | Value |
Distribution per share | USD $0.4137 |
Ex-dividend date | 15 January 2026 |
Paid date | 16 January 2026 |
ROC portion | 93.90% |
Taxable portion | 6.10% |
The pre-filled dividend data in Navexa shows:
Field | Value |
Net Payment | USD $70.33 |
Foreign Tax Withheld/Offset | USD $12.41 |
Gross Payment | USD $82.74 |
Calculate the split:
Component | Calculation | Amount |
Taxable gross | USD $82.74 × 6.10% | USD $5.05 |
ROC amount | USD $82.74 × 93.90% | USD $77.69 |
Update the income entry:
Field | Value |
Net Payment | USD $4.29 |
Foreign Tax Withheld/Offset | USD $0.76 |
Notes | YieldMax schedule shows 93.90% ROC for 16 January 2026 distribution |
Then add a Return of Capital trade:
Field | Value |
Trade Type | Return of Capital |
Date | 16 January 2026 |
Amount | USD $77.69 |
Notes | 93.90% ROC from 16 January 2026 MSTY distribution |
After saving, the Taxable Income report should show AUD $68.74 as income, and the ROC trade should reduce the cost base by AUD $105.56.
Where Each Part Goes
Component | Where To Record It | Effect In Navexa |
Taxable income | Edit the income entry in the Income tab | Appears in the Taxable Income report |
Return of Capital | Add a Return of Capital trade in the Trades tab | Reduces cost base and affects future CGT |
Common Issues
What If The Distribution Is 100% ROC?
If the distribution is 100% ROC, edit the income entry to show 0 taxable income where possible.
Then record the full distribution amount as a Return of Capital trade.
What If I Do Not Know The ROC Split?
If you do not know the ROC split, wait for the official fund statement, broker tax summary, or tax document.
Do not estimate the split from the cash payment alone. The cash payment does not always show how much is taxable income versus Return of Capital.
Why Does ROC Show As Negative?
A Return of Capital trade may show as a negative amount because it reduces your cost base.
This does not mean the trade is wrong. It means Navexa is recording the capital returned to you separately from taxable income.
Remember, this is general information, not personal financial advice.