DWS Strategic Value Fund - Colonial First State

TaxInvesting in the Fund has tax andpotential social security implications,depending upon your particularsituation.This PDS provides generalinformation only and is limited toinvestors that are Australianresidents for tax purposes that holdtheir units on capital account.Furthermore, tax laws may havechanged since the date of this PDS.Accordingly, we recommend that youobtain independent professionaladvice on the tax implications ofinvesting in the Fund that takesaccount of your own particularcircumstances.You must receive this PDS withinAustralia. However, if you are not anAustralian resident for tax purposes,please state in the Application Formyour country of residence for taxpurposes. If you are not an Australianresident for tax purposes or if youprovide us with an address outsideAustralia, tax may be withheld fromsome components of distributions atprescribed rates. You may be subjectto the tax laws in your country ofresidence and should consult a taxadviser before investing.Tax status of the FundThe Fund should be characterised asa trust for Australian tax purposes.As the net income of the Fund is fullydistributed to investors each year,the Fund should not generally beliable for Australian income tax.Accordingly, the Fund will be treatedas a ‘flow through’ entity for taxpurposes.Will you be liable to pay taxon income you receive fromthe Fund?Your share of the net income of theFund for each year ended 30 Juneshould generally be included asassessable income in your tax returnfor each such year, even if yourdistribution is reinvested in additionalunits in the Fund or paid in the nextyear. If your distribution is reinvestedyou may have to pay tax from yourown sources.The character of each component ofthe Fund’s net income will be passedthrough to investors. In respect ofeach year for which you receive adistribution from the Fund, we willsend you a tax statement that willindicate the composition of thedistributions you have received fromthe Fund including Australian sourcedinterest and other Australian orforeign sourced income. Thedistributions of the Fund are notexpected to include discount capitalgains or other capital gains.As the Fund invests predominantly inforeign securities (being itsshareholding in DB Strategic ValueFund), distributions may includeforeign sourced income that mayhave been subject to foreignwithholding taxes. The benefits ofany tax offsets arising from foreigntaxes withheld relating to a share ofnet income should generally passthrough to investors. The benefits ofany tax offsets the Fund receives in aparticular year may be lost if theFund is in a net loss position for thatincome year.Where the Fund is able to passthrough tax offsets to investors, yourability to utilise these tax offsets willdepend upon your own particularcircumstances including your totallevel of taxable income and yourincome tax rate.The Fund’s shareholding inDB Strategic Value Fund, should giverise to an interest in a controlledforeign company (‘CFC’) or a foreigninvestment fund (‘FIF’) depending onthe shareholder profile of DB StrategicValue Fund at the end of eachincome year. In either case, it is theResponsible Entity’s intention tomanage the Fund’s investments inDB Strategic Value Fund such thataccrued gains and loses willgenerally be realised annually.Accordingly, no accruals based taxliability should arise under the CFCor FIF measures in respect of yourinvestment in the Fund. However, ifthe Responsible Entity is unable toachieve this, your tax statement willshow the amount to be included inyour tax return.On 12 May 2009 the Governmentannounced a proposal to repeal theFIF regime and to modernise theexisting CFC provisions. As at date ofthis PDS, the Government has notreleased any further details withrespect to these proposedamendments. The ResponsibleEntity will continue to monitor theimpact on the determination of netincome of the Fund, if any, ofamendments to the CFC andFIF provisions.Tax reform – taxation of financialarrangementsThe Taxation Laws Amendments(Taxation of Financial Arrangements)Act 2009 (‘TOFA’), which appliesfrom 1 July 2010, contains new rulesfor the taxation of financialarrangements. A limited exemptionfrom the new rules applies to certainmanaged investment schemes(broadly where such schemes haveassets of less than $100 million).18