Hargreaves Lansdown Vantage ISA - Reclaim Bond Income?

mr_fishbulb

Hi all - my question for today is:

I have a Hargreaves Lansdown Vantage ISA. If I buy a bond fund, how do I get back the 20% deducted from the interest?

Their Guide to ISA's say "The tax paid on the income from gilts and corporate bonds, or funds which invest at least 60% in gilts and corporate bonds, can also be reclaimed." But it doesn't say if they do it, or if I have to do it.

Does H-L do it automatically for me like Halifax seems to (http://www.halifax.co.uk/sharedealing/important_information/Self_select_funds_ISA.asp - "If the income is paid from fixed interest funds such as corporate bond funds, we will either receive the payment gross and pay the full amount into your ISA or we will receive it net of 20% tax, and we will reclaim the tax back from HM Revenue & Customs then pay it into your ISA").

Or have I got it wrong all together?

Cheers

chineplate

HL reclaim it and credit it to your account, takes a few weeks.

RayWolfe

H-L, or indeed, any ISA provider will reclaim and pay you the tax on a bond fund. With some managers to tax comes with the interest, with others you get it a couple of months later.

mr_fishbulb

chineplate wrote: »

HL reclaim it and credit it to your account, takes a few weeks.

Many thanks.

Do you know if they reinvest it automatically if I have an Accumulation fund?

strawberrylane

^^ You won't get an explicit income payout if you hold an Acc fund. The income accumulates daily and is not paid out. For any Inc funds you hold, the income would be automatically re-invested if you have previously given the ISA manager an instruction to reinvest income. HTH.

RayWolfe

mr_fishbulb wrote: »

Do you know if they reinvest it automatically if I have an Accumulation fund?

It will certainly be reinvested.
The actual mechanism escapes me at the moment - it is many years since I held acc units - but I seem to remember that the tax is explicitly added to your account and then reinvested in more units ... I seem to remember that it's quite convoluted.
Give 'em a call.