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    • captainreckless
    • By captainreckless 7th Oct 17, 12:55 PM
    • 20Posts
    • 15Thanks
    captainreckless
    Tax on acc funds
    • #1
    • 7th Oct 17, 12:55 PM
    Tax on acc funds 7th Oct 17 at 12:55 PM
    Sorry if this has been asked before...

    What is the tax liability for acc investment funds held outside of a tax wrapper? I naively assume that tax would be payable upon selling units in the event that the sale realised a value greater than the capital gains allowance for that year. However, I suspect that things might not be so simple.

    For example, if I am living and working abroad and cannot add money to my ISA or SIPP, can I still invest in a non-tax wrapper account in the UK and only have to worry about tax if I sell more than the capital gains allowance in a year? Would any increase in the value of the units due to dividend income count as UK income that would complicate any 'non-resident for tax purposes' status?

    Thanks.
Page 1
    • ColdIron
    • By ColdIron 7th Oct 17, 2:03 PM
    • 3,464 Posts
    • 4,074 Thanks
    ColdIron
    • #2
    • 7th Oct 17, 2:03 PM
    • #2
    • 7th Oct 17, 2:03 PM
    Dividends are taxable outside tax sheltered accounts such as ISAs and SIPPs. It doesn't matter whether they are retained in your fund with Acc units or paid as cash with Inc units. You have a dividend allowance of £2,000 £5,000 this tax year which may mean you have no liability though you might still need to declare them. What you are thinking of is Capital Gains Tax and you are right in that it only applies on disposal. CGT is separate from though possibly additional to dividend liability

    I'll pass on your part 2 and it may have consequences on the above
    Last edited by ColdIron; 07-10-2017 at 5:54 PM.
    • eskbanker
    • By eskbanker 7th Oct 17, 2:13 PM
    • 5,607 Posts
    • 5,440 Thanks
    eskbanker
    • #3
    • 7th Oct 17, 2:13 PM
    • #3
    • 7th Oct 17, 2:13 PM
    You have a dividend allowance of £2,000 this tax year
    Originally posted by ColdIron
    Still £5,000 this tax year, the reduction to £2,000 applies from 2018/19....
    • ColdIron
    • By ColdIron 7th Oct 17, 2:27 PM
    • 3,464 Posts
    • 4,074 Thanks
    ColdIron
    • #4
    • 7th Oct 17, 2:27 PM
    • #4
    • 7th Oct 17, 2:27 PM
    Hmm, I thought the 2nd Finance Bill confirmed their introduction and 2017/18 date but a quick Google proves you right, so I'm £225 richer than I thought, ta very much
    • captainreckless
    • By captainreckless 7th Oct 17, 5:12 PM
    • 20 Posts
    • 15 Thanks
    captainreckless
    • #5
    • 7th Oct 17, 5:12 PM
    • #5
    • 7th Oct 17, 5:12 PM
    Thanks. I suspected something like that would be the case.

    I've never owned funds outside of a tax wrapper. Seems like holding accumulation funds would be hassle if you have to work out what fraction of any gains are due to dividend income and then declare it.
    • ColdIron
    • By ColdIron 7th Oct 17, 5:24 PM
    • 3,464 Posts
    • 4,074 Thanks
    ColdIron
    • #6
    • 7th Oct 17, 5:24 PM
    • #6
    • 7th Oct 17, 5:24 PM
    It can be, although you should get a consolidated tax certificate with these (and any equalisation payment) details for unwrapped accounts unlike an ISA/SIPP. Income units are probably cleaner
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