This guide helps you record ROC correctly so your income reports stay clean and your cost base is adjusted for accurate CGT later.
Important note
This guide is general in nature and not tax advice. Always use your fund’s official distribution/tax statement (or a qualified tax professional) as the source of truth for the taxable vs ROC split.
What Return of Capital (ROC) means
A Return of Capital (ROC) is not income. It’s when part of your original investment is returned to you.
In practical terms:
ROC reduces your cost base
That can create a larger capital gain (or smaller loss) when you sell later
It should not inflate your taxable income reporting
When you need to do this in Navexa
Navexa will often auto-create a distribution entry in your Income tab (via broker/import data).
If that payout includes a ROC component, you’ll want to:
Keep only the taxable income portion in the Income entry
Record the ROC portion as a separate Return of Capital trade (so cost base is reduced)
Before you start: get the ROC split
You need the breakdown (income vs ROC) from an official source, such as:
The fund’s distribution breakdown/tax statement
Your broker’s tax summary
For US holdings, this is commonly shown on forms like a 1099 (often as “nondividend distributions” for ROC)
Which workflow applies to you?
Use the workflow that matches what you see when editing the distribution/update dividend:
If you see Trust Income fields → follow Trust-style workflow (common for some AU trust distributions)
If you only see Net Payment and Foreign Tax Withheld/Offset (no Trust Income section) → follow Standard dividend workflow (common for US ETFs like MSTY (NYSE))
Step 1: Open the distribution you need to adjust
Open the ETF holding in Navexa
Go to Income
Find the distribution entry → click Edit
From here, Step 2 is where the workflow differs depending on what fields you see.
Step 2: Update the Income entry (keep taxable income only)
If you see “Trust Income” fields (trust-style distributions)
Leave Ex Dividend Date and Paid Date as-is
Update the fields so they reflect only the taxable portion (per your statement)
Add a note describing the split/source (optional but recommended)
Click Update Dividend
Tip: Put the split in Notes (e.g., “Taxable $X, ROC $Y per unit per statement”).
If you do NOT see “Trust Income” fields (standard dividend entry, e.g. MSTY on NYSE)
You’ll usually see fields like Net Payment and Foreign Tax Withheld/Offset, but no Trust Income section.
Leave Ex Dividend Date and Paid Date as-is
Update Net Payment so it reflects only the taxable portion (not the full payout)
Update Foreign Tax Withheld/Offset to match the taxable portion
Best: use the exact taxable withholding amount from your statement
If your statement only gives totals, you can apply the same split ratio as a fallback
Add a note describing the split/source (optional but recommended)
Click Update Dividend
Why adjust withholding? So the Gross Payment Navexa calculates matches the taxable income portion you’re keeping in the dividend entry.
Step 3: Add the ROC portion as a Return of Capital trade
Go to the holding’s Trades tab
Click +Add
Set Trade Type to Return of Capital
Use the same Paid date as the distribution
Enter the ROC Amount (the non-taxable portion)
Add a note describing the split/source (recommended)
Click Add Trade / Save
You may see ROC appear as a negative in the trade list. That’s intentional: it represents a reduction to cost base.
Step 4: Verify your reports
After saving both entries:
Income / Taxable Income reporting reflects only the taxable portion
Capital gains calculations reflect the reduced cost base (because of the ROC trade)
Portfolio performance remains logically consistent over time
Let’s walk through a real example for each type.
Example 1: US ETF (MSTY) with no Trust Income fields
You hold 2000 units of YMAX (NYSE:MSTY).
The official YieldMax ETF distribution table for January 2026 shows:
Source data (from the fund schedule above)
Distribution per share: $0.4137
Ex date: 15/01/2026
Payable date: 16/01/2026
ROC: 93.90% (so taxable portion is 6.10%)
In Navexa, the prefilled dividend shows:
Net Payment (USD): 70.33
Foreign Tax Withheld/Offset (USD): 12.41
Gross Payment (USD): 82.74
This implies 200 shares, because: 200 × $0.4137 = $82.74.
Step 1: Calculate the split (gross)
Taxable gross (6.10%) = 82.74 × 0.061 = 5.04714 → $5.05
ROC amount (93.90%) = 82.74 × 0.939 = 77.69286 → $77.69
(Per share, that’s approx $0.02524 taxable and $0.38846 ROC.)
Step 2: Edit the Income entry (keep taxable income only)
Open MSTY → Income → find the distribution → Edit, then update:
Net Payment (USD): 70.33 × 0.061 = 4.29013 → $4.29
Foreign Tax Withheld/Offset (USD): 12.41 × 0.061 = 0.75701 → $0.76
Leave the Ex dividend date and Paid date unchanged, add a note like:
“YieldMax schedule shows 93.90% ROC for 16/01/2026 distribution.”
Then click Update Dividend.
Rounding tip: If your taxable gross is off by $0.01 after rounding, adjust Net Payment by $0.01 so that Net + Withheld = taxable gross.
Step 3: Add the ROC portion as a Return of Capital trade
Go to MSTY → Trades → +Add:
Trade Type: Return of Capital
Date: 16/01/2026
Capital Return Value Amount (USD): $77.69
Exchange rate used
Notes: “93.90% ROC (16/01/2026)”
This reduces cost base but does not show as income.
Example 2: Trust-style distribution (Trust Income fields shown)
You hold 1,000 units of YMAX (ASX:YMAX).
The official YieldMax ETF distribution table for October 2025 shows:
Detail | Value |
Distribution per share | $0.1743 |
Return of Capital (ROC) | 60.55% |
Taxable income portion | 39.45% |
Paid date | 16/10/2025 |
Step 1. Calculate the Split
Total distribution:
1,000 × $0.1743 = $174.30
Taxable portion (39.45%)
$174.30 × 0.3945 = $68.74
Return of Capital portion (60.55%)
$174.30 × 0.6055 = $105.56
✅ Total check: $68.74 + $105.56 = $174.30
Step 2. Edit the Prefilled Dividend
Open your YMAX Income tab, find the dividend with Paid Date 16/10/2025, and click Edit.
Update as follows:
Field | Value |
Trust Income: | Yes 1️⃣ |
Ex Dividend Date: | 15/10/2025 2️⃣ |
Paid Date: | 16/10/2025 3️⃣ |
Franked Amount: | 0 4️⃣ |
Franking Credits: | 0 5️⃣ |
Unfranked Amount: | 68.74 6️⃣ |
Notes: | “Taxable portion = 39.45% ($0.06874 per share)” 7️⃣ |
It should look like this:
Then click Update Dividend 8️⃣.
Step 3. Add the Return of Capital Trade
Next, record the ROC portion as a separate trade.
Field | Value |
Trade Type: | Return of Capital 1️⃣ |
Date: | 16/10/2025 2️⃣ |
Amount: | 105.56 3️⃣ |
Notes: | “60.55% ROC from YMAX 16 Oct 2025 distribution ($0.10556 per share)” 4️⃣ |
It should look like this:
Click Add Trade.
After saving, you’ll see your Return of Capital shown as a negative amount in the Trades list — for example:
This is intentional — it means that capital has been returned to you and your cost base reduced accordingly.
Step 4. Confirm Your Reports
After both updates:
Taxable Income Report → shows $68.74 income.
Capital Gains Report → cost base reduced by $105.56.
Performance view → unchanged overall.
Why ETFs Include Return of Capital
ETFs like YMAX or ULTY often use covered call or income enhancement strategies.
They sometimes distribute option premium or capital as part of the income stream.
That’s classified as Return of Capital, not taxable income — but it reduces your cost base, meaning a potentially larger capital gain when you sell later.
Summary
Component | Where to Record | Effect in Navexa |
Taxable Income | Edit the prefilled dividend (Income tab) | Appears in Taxable Income Report |
Return of Capital | Add a Return of Capital trade (Trades tab) | Reduces cost base, not income |
Common edge cases
The distribution is 100% ROC
Step 2: edit the Income entry to $0 taxable (where possible)
Step 3: record the full amount as a Return of Capital trade
I’m not sure what the ROC split is
Don’t guess. Wait for the official breakdown (or use your broker/fund statement). ROC directly impacts cost base, so accuracy matters.