Laws and tax rules may change in the future. A client's personal circumstances and where they live in the UK will also have an impact on tax treatment.

 

 

Distributions

Although they are not paid in cash, distributions on Accumulation units are still subject to withholding tax and client may have additional tax to pay if the funds are held in Personal Portfolio.

Equalisation (given on Group 2 units) is not an income payment and is not subject to withholding tax. It should instead be used to adjust capital gains tax (CGT) liability.

Some platforms offer both gross and net nominee accounts; this means they are able to receive gross distributions (i.e. no tax deducted) on certain distributions. Our nominee is net which means that distributions are mostly received net. We carry out tax reclaims where appropriate – the process for doing this varies by product.

 

 

Fund distributions

A fund distribution will be either interest-related (taxed at 20%) or dividend-related (taxed at 10%). The rule is that if 60% of the income is interest-related, then it’s an interest distribution; less than that and it’s ‘dividend’.

Group 2 and Group 1 are markers applied by the fund manager to determine if these units are entitled to the next distribution in full; after the first ex-date, Group 2 units (which get a partial distribution) are turned into Group 1 units (full distribution) automatically.

The tax figures shown in Performance / Tax only relate to the withholding tax that has been deducted from dividends and interest – the client may have additional tax liability for some or all of their investments.

 

 

Interest

Interest on Personal Portfolio is always net, regardless of the type of client; interest is always gross on Wrap ISA, International Portfolio Bond and SIPP.

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