TAXES announced by Australia for Hong Kong-managed pension funds are not likely to have an adverse impact on portfolios, finance experts say.
Fund managers say this is because the Australian equity portion in funds is less than five per cent on average.
The taxation measures, due to take effect on July 1 in Australia, will not drive fund managers away from Australian equities either.
Hong Kong-managed pension funds will be subject to withholding tax of 10 per cent on interest and 30 per cent on certain types of dividends on Australian equities, under the new laws.
The measures will close a loophole which helped lessen the tax impact on dividends and income liabilities of Australian expatriates' retirement savings.
Hong Kong fund managers said they would take these taxes into consideration in future allocations in their portfolios.