2017 Legg Mason Tax Guide IMPORTANT TAX INFORMATION ...

2017 Legg Mason Tax Guide

IMPORTANT TAX INFORMATION REGARDING YOUR MUTUAL FUNDS

This guide is a summary of tax

Table of contents

information for certain Legg Mason,

Exempt interest income -- Multi-state funds

2

ClearBridge Investments, Brandywine

Exempt interest income Single state funds

4

Global, QS Investors, Martin Currie,

Income from Federal obligations

5

EnTrustPermal, RARE Infrastructure and Foreign source income

6

Western Asset closed-end, open-end and Dividends Received Deduction for Corporations

8

exchange-traded funds. This information

may be useful to you, as an investor, in

the preparation of your 2017 Federal and

state income tax returns. We recommend

that you consult your tax advisor for

assistance with how this information will

impact your specific tax situation.

Please see back cover for important disclosures

Click here

SECTION 1

In this section you will find information for the Western Asset multi-state funds that have paid income dividends which are tax-exempt for regular Federal income tax purposes. The percentages of income earned by the funds from each state or U.S. Territory are listed below.

See Footnotes after Section 5. Exempt interest income -- Multi-state funds

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Guam Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Puerto Rico Rhode Island South Carolina South Dakota Tennessee Texas U.S. Virgin Islands Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Other U.S. Territories

Western Asset Intermediate-Term Municipals Fund

0.27 % -

0.50 -

15.52 4.47 0.14 0.10 6.11 2.83 6.46 3.55 0.92 0.14 0.41 0.88 1.22 1.49 6.20 0.19 0.08 0.87 0.01 0.67 5.24 1.24 8.96 1.83 0.15 0.18 0.69 3.15 0.21 0.31 4.97

12.00 0.70 0.16 0.12 1.56 2.40 0.92 1.46 0.69 0.03

Western Asset Managed

Municipals Fund 3.05 % 0.18 0.59 -

19.97 2.46 0.99 0.42 0.33 7.14 4.84 6.74 1.56 0.21 0.54 0.90 1.57 3.32 4.28 0.41 0.09 1.34 0.01 0.48 0.12 6.56 0.51 7.21 1.68 0.30 0.22 0.64 3.26 0.26 0.49 0.02 1.24

11.15 0.58 0.22 0.12 1.20 1.14 0.33 1.04 0.29 -

Western Asset Municipal High Income

Fund 4.63 % 2.40 8.21 4.90 1.52 0.96 2.20 0.01 1.63 6.34 2.22 2.32 0.17 7.23 4.90 2.52 1.85 0.01 0.52 5.44 0.34 6.25 0.21 1.60 2.18 3.93 0.03 -

20.57 1.60 0.09 1.89 0.23 1.10 -

Western Asset Short Duration

Municipal Income Fund

1.80 % 1.38 1.12 0.11 3.19 2.05 4.11 0.01 0.55 1.93 5.32

0.15

12.22

6.28 -

0.16 1.79 0.04

1.06 5.59 0.14 0.20 0.37 0.62 0.70 0.38 8.48 3.31 9.91 0.55 0.71 0.01 0.54 7.38 0.67 0.27 12.13 0.02 1.94 1.08 0.38 0.87 0.01 0.47

Western Asset SMASh Series TF

Fund 4.38 % 3.12 -

10.91 4.57 0.30 1.14 0.14 4.07 0.89 0.14 0.08 9.39 2.27 0.09 0.45 4.02 0.21 0.50 9.25 0.29

18.68 2.52 0.17 0.04 1.66 1.40 0.20 4.48

10.69 0.84 0.12 0.34 1.83 0.71 0.01 0.06 0.04

Western Asset Select Tax Free Reserves and Western Asset Tax Free

Reserves -

0.35 % -

13.05 0.09 2.30 0.05 0.28 7.85 4.80 1.91 0.34 4.05 1.80 0.84 0.83 1.87 4.91 1.32 0.12 0.56 2.90 1.03 0.78 -

28.60 1.85 0.42 0.17 0.37 3.78 0.56 0.53 0.54 5.04 0.89 0.04 1.34 3.36 0.01 0.47

Alternative Minimum Tax Percentage:

9.50 %

6.77 %

9.21 %

19.19 %

8.21 %

14.59 %

2017 Legg Mason Tax Guide

2

SECTION 1

In this section you will find information for the Western Asset multi-state funds that have paid income dividends which are tax-exempt for regular Federal income tax purposes. The percentages of income earned by the funds from each state or U.S. Territory are listed below.

See Footnotes after Section 5.

Exempt interest income -- Multi-state funds

Alabama Alaska Arizona Arkansas California Colorado Connecticut Delaware District of Columbia Florida Georgia Guam Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Puerto Rico Rhode Island South Carolina South Dakota Tennessee Texas U.S. Virgin Islands Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming Other U.S. Territories

Western Asset Intermediate

Muni Fund Inc. (SBI) 0.88 % 2.82 13.13 4.53 0.78 0.03 5.94 4.30 7.10 6.25 2.01 0.26 0.41 3.99 0.01 2.70 4.15 8.67 0.79 5.07 1.11 0.01 1.80 0.66 1.89 4.73 6.63 0.64 0.12 4.36 1.39 2.83 0.01

Western Asset Managed Municipals

Fund Inc. (MMU) 4.87 % 2.98 14.29 8.53 0.01 1.82 7.15 3.56 0.89 8.57 2.90 0.51 4.32 3.40 0.15 1.96 0.24 1.58 5.80 0.77 9.64 0.26 1.24 0.10 0.26 1.61 0.89 0.34 0.02 0.04 9.33 0.55 0.10 1.00 0.13 0.19 -

Alternative Minimum Tax Percentage:

12.93 %

12.60 %

Western Asset Municipal Defined

Opportunity Trust Inc.

(MTT) 3.33 % 2.75 3.47 3.97 0.01 0.03 2.03 7.81 3.66 7.64 4.60 4.10 0.08

11.66 -

0.02 -

0.01 -

6.75 -

6.79 0.27

0.09 0.19 5.09 5.16 11.68 2.01 0.07 0.93 0.54 5.26 -

8.41 %

Western Asset Municipal High Income Fund Inc.

(MHF) 6.18 % 3.18 9.82 4.91 1.34 1.52 2.32 2.95 1.62 4.54 1.68 1.55 0.11 2.37 1.55 3.84 2.42 2.09 0.50 5.50 3.48 0.28 0.39 1.29 0.40 4.46 -

24.01 2.11 0.12 2.34 0.07 1.06 -

Western Asset Municipal Partners

Fund Inc. (MNP) 1.23 % 0.83 1.63 13.38 5.19 0.02 0.04 4.90 6.59 1.45 0.78 0.59 1.95 3.68 1.29 0.01 7.29 16.99 2.22 1.92 1.21 0.67 5.34 0.02 3.56 9.94 0.64 0.10 0.37 2.40 3.77 -

14.90 %

9.45 %

2017 Legg Mason Tax Guide

3

SECTION 2

In this section you will find information for the Western Asset single state funds that have paid income dividends which are tax-exempt for regular Federal income tax purposes.

See Footnotes after Section 5.

Exempt interest income -- Single state funds

Fund Name Western Asset California Municipals Fund Western Asset California Tax Free Money Market Fund (a) Western Asset Intermediate Maturity California Municipals Fund Western Asset Intermediate Maturity New York Municipals Fund Western Asset Massachusetts Municipals Fund Western Asset New Jersey Municipals Fund Western Asset New York Municipals Fund Western Asset New York Tax Free Money Market Fund Western Asset Oregon Municipals Fund Western Asset Pennsylvania Municipals Fund

Specified state California

Percentage of income from obligations exempt in specified state

Percentage of income from obligations of Puerto Rico, U.S. Virgin Islands and

Guam

98.38 %

1.56 %

Percentage of income from obligations of other states

0.06 %

California

99.99

-

0.01

California

95.16

4.76

0.08

New York

95.48

4.50

0.02

Massachusetts

97.63

2.05

0.32

New Jersey

97.64

2.20

0.16

New York

95.87

4.13

-

New York

100.00

-

-

Oregon

98.17

1.37

0.46

Pennsylvania

98.73

1.14

0.13

Alternative Minimum Tax Percentage

2.97 % 17.46

0.07 9.02

14.57

9.70 17.65

1.84 2.67

2017 Legg Mason Tax Guide

4

SECTION 3

Certain states may exempt the portion of dividends (reported in Box 1a on Form 1099-DIV) derived from assets backed by the full faith and credit of the U.S. Government.*

The table below provides the percentages of those dividends available for this exclusion. Only those Funds that appear in this section have distributed income that qualifies for this exclusion.

See Footnotes after Section 5.

Income from Federal obligations

Fund Name BrandywineGLOBAL - Alternative Credit Fund (b) BrandywineGLOBAL - Global Flexible Income Fund (c) BrandywineGLOBAL - Global Opportunities Bond Fund (d) BrandywineGLOBAL - Global Unconstrained Bond Fund (e) QS Conservative Growth Fund QS Defensive Growth Fund QS Growth Fund QS Moderate Growth Fund QS Strategic Real Return Fund Western Asset Adjustable Rate Income Fund Western Asset Core Bond Fund Western Asset Core Plus Bond Fund Western Asset Corporate Bond Fund Western Asset Government Reserves Western Asset Global High Income Fund Inc. (EHI) (f) Western Asset Global High Yield Bond Fund (f) Western Asset High Income Fund II Inc. (HIX) (f) Western Asset Income Fund (PAI) Western Asset Inflation Indexed Plus Bond Fund ** Western Asset Institutional Government Reserves Western Asset Institutional Liquid Reserves Western Asset Institutional U.S. Treasury Obligations Money Market Fund ** Western Asset Institutional U.S. Treasury Reserves ** Western Asset Intermediate Bond Fund Western Asset Macro Opportunities Fund Western Asset Mortgage Back Securities Fund Western Asset Premier Bond Fund (WEA) Western Asset Premium Liquid Reserves Western Asset Premium U.S. Treasury Reserves ** Western Asset Short-Term Bond Fund Western Asset SMASh Series C Fund Western Asset SMASh Series EC Fund Western Asset SMASh Series M Fund Western Asset Total Return Unconstrained Fund Western Asset U.S. Treasury Reserves **

* Includes U.S. Treasury Bills, U.S. Treasury Notes, U.S. Treasury Bonds, and obligations issued by the Federal Home Loan Bank, Federal Credit Banks and the Student Loan Marketing Association.

** These Funds have met the quarterly asset requirements for California, Connecticut and New York resident shareholders.

2017 Legg Mason Tax Guide

Percentage 1.05 % 2.15 7.19 8.70 7.65

10.38 1.78 3.96

32.65 0.99

22.59 19.08

2.54 40.38

1.09 0.78 0.93 0.72 89.63 39.87 0.39 68.86 100.00 27.63 11.20 0.82 1.17 0.80 99.65 1.51 3.52 2.60 36.71 10.73 99.81

5

SECTION 4

This information is provided for those shareholders electing to take the foreign tax credit for Federal income tax purposes.

Shareholders taking an itemized deduction for foreign taxes paid: Include the amount shown in Box 6 on Form 1099-DIV as an itemized deduction on Schedule A (Form 1040).

Shareholders electing to claim the Foreign Tax Credit on either Form 1116 ("Foreign Tax Credit") for individuals, or Form 1118 ("Foreign Tax Credit -corporations") for corporate shareholders: Please note that shareholders claiming a foreign tax credit on income passed through from a mutual fund are no longer required to report foreign source income and foreign taxes paid on a country-by-country basis. Corporate shareholders, please refer to the 2017 Distribution Reclassifications which may be found in the Tax Center of the Legg Mason website for the per share amount of the Foreign Withholding Taxes paid. Please refer to the instructions for Form 1116 or 1118 and consult your tax advisor for further assistance.

See Footnotes after Section 5.

Foreign source income

Fund Name BrandywineGLOBAL - Global Opportunities Bond Fund (d) BrandywineGLOBAL - Global Unconstrained Bond Fund (e) ClearBridge International Growth Fund

Payable Date

Quarterly March - December

Quarterly March - September

12/21/2017

12/20/2017

Percentage of Income from Foreign Sources

42.55 % (1)

80.29

(2)

75.88

(2)

99.67

(1)

Percentage of Income from Foreign Source Dividends (3)

-

-

99.67 %

ClearBridge International Small Cap Fund

12/20/2017

48.38

(1)

46.40

ClearBridge International Value Fund

12/07/2017

99.41

(1)

99.41

Legg Mason Developed ex-US Diversified Core ETF (DDBI)

12/29/2017

91.46

(1)

91.46

Legg Mason Emerging Markets Diversified Core ETF (EDBI) Legg Mason Emerging Markets Low Volatility High Dividend ETF (LVHE) Legg Mason Global Infrastructure ETF (INFR) Legg Mason International Low Volatility High Dividend ETF (LVHI) Martin Currie Emerging Markets Fund Martin Currie International Unconstrained Equity Fund QS Conservative Growth Fund QS Defensive Growth Fund QS Dynamic Multi-Strategy Fund (g) QS Growth Fund QS International Dividend Fund QS International Equity Fund

12/29/2017

Quarterly March - September

12/29/2017 Quarterly April - October 12/29/2017 Quarterly March - September 12/29/2017

12/20/2017

12/06/2017

12/20/2017

03/31/2017 Quarterly June - December 03/31/2017 Quarterly June - December

06/13/2017

06/13/2017

12/28/2017 Quarterly March - September 12/21/2017

12/06/2017

67.21

(1)

100.00

(2)

59.04

(2)

72.89

(2)

8.39

(2)

86.23

(2)

92.67

(2)

100.00

(1)

87.36

(2)

88.63

(2)

2.88

(2)

4.17

(2)

3.13

(2)

5.75

(2)

11.95

(1)

59.01

(2)

17.85

(2)

97.79

(2)

82.79

(2)

88.66

(1)

51.68

59.50 35.37 72.89

8.39 70.56 86.11 70.53 80.37 83.29

2.88 4.17 3.13 5.75

11.95 59.01 17.85 96.86 82.79 88.66

2017 Legg Mason Tax Guide

6

SECTION 4

This information is provided for those shareholders electing to take the foreign tax credit for Federal income tax purposes.

Shareholders taking an itemized deduction for foreign taxes paid: Include the amount shown in Box 6 on Form 1099-DIV as an itemized deduction on Schedule A (Form 1040).

Shareholders electing to claim the Foreign Tax Credit on either Form 1116 ("Foreign Tax Credit") for individuals, or Form 1118 ("Foreign Tax Credit -corporations") for corporate shareholders: Please note that shareholders claiming a foreign tax credit on income passed through from a mutual fund are no longer required to report foreign source income and foreign taxes paid on a country-by-country basis. Corporate shareholders, please refer to the 2017 Distribution Reclassifications which may be found in the Tax Center of the Legg Mason website for the per share amount of the Foreign Withholding Taxes paid. Please refer to the instructions for Form 1116 or 1118 and consult your tax advisor for further assistance.

See Footnotes after Section 5.

Foreign source income

Fund Name QS Moderate Growth Fund RARE Global Infrastructure Value Fund

Payable Date

06/13/2017

12/28/2017 Quarterly March - September 12/20/2017

Percentage of Income from Foreign Sources

1.28 % (2)

10.81

(2)

57.83

(2)

26.03

(2)

Percentage of Income from Foreign Source Dividends (3)

1.28 %

10.81

57.83

26.03

(1) To determine your share of the Fund's foreign source income, multiply the total foreign source percentage indicated by the amount shown in Box 1a of Form 1099-DIV.

(2) To determine your share of the Fund's foreign source income, multiply the total foreign source percentage indicated by the distribution received on the indicated date. Do not multiply this percentage by the amount shown on Box 1a of Form 1099-DIV.

(3) As a result of lower tax rates on qualified dividends, in computing your foreign tax credit, you may need to make certain adjustments based on your foreign source qualified dividends. To compute your amount of foreign source qualified dividends, multiply the Percentage of Income from Foreign Source Dividends by the amount shown in Box 1a of Form 1099-DIV.

2017 Legg Mason Tax Guide

7

SECTION 5

The list below provides corporate shareholders with the percentages of their gross ordinary dividends that qualify for the dividends received deduction for corporations. Only those Funds that appear in this section have distributed income that qualifies for this deduction.

See Footnotes after Section 5. Dividends Received Deduction for Corporations

Fund Name BrandywineGLOBAL - Diversified US Large Cap Value Fund (h) BrandywineGLOBAL - Dynamic US Large Cap Value Fund (i) ClearBridge Aggressive Growth Fund ClearBridge All Cap Growth ETF (CACG) ClearBridge All Cap Value Fund ClearBridge Appreciation Fund ClearBridge Dividend Strategy ESG ETF (YLDE) ClearBridge Dividend Strategy Fund ClearBridge Energy MLP & Infrastructure Fund ClearBridge Global Heathcare Innovations Fund ClearBridge International Growth Fund ClearBridge Large Cap Growth ESG ETF (LRGE) ClearBridge Large Cap Growth Fund ClearBridge Large Cap Value Fund ClearBridge Mid Cap Fund ClearBridge Select Fund ClearBridge Small Cap Fund ClearBridge Small Cap Value Fund ClearBridge Sustainability Leaders Fund ClearBridge Tactical Dividend Income Fund (j) ClearBridge Value Trust EnTrustPermal Alternative Core Fund (j) Legg Mason Global Infrastructure ETF (INFR) Legg Mason Low Volatility High Dividend ETF (LVHD) Legg Mason Small-Cap Quality Value ETF (SQLV)

Payable Date 12/06/2017

12/06/2017

12/20/2017

12/29/2017

12/07/2017

12/06/2017 Quarterly June - September Quarterly March - December Quarterly March - December 12/06/2017

12/20/2017

12/29/2017

12/07/2017 Quarterly March - December 12/06/2017

12/06/2017

12/06/2017

12/07/2017

12/06/2017 Quarterly March - September 12/06/2017

06/13/2017 Quarterly April - October Quarterly March through September 12/29/2017

Qualifying Percentage

100.00 % 52.97

100.00 100.00

90.14 100.00

88.03 100.00 100.00

21.67 4.54

100.00 100.00 100.00 100.00

27.30 24.66 28.58 100.00 100.00 100.00 20.49 31.51 79.07 100.00

Payable Date

12/29/2017

12/20/2017

12/20/2017

12/21/2017

12/29/2017 12/29/2017

Qualifying Percentage

73.30 % 28.36

41.25

30.15 30.21 66.41

2017 Legg Mason Tax Guide

8

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