Tax position re accumulation funds

justacannycodger

Hi,

I have various investments in accumulation & Income funds & recently recieved a consolidared tax voucher which showed schedule of dividends having been added to these funds during the Tax period. Unlike those dividends which refer to income Funds where the dividends were re-invested and purchased added units in the individual funds, I can not see any increase in my holding in the accumulation funds or in the unit price. If I am liable to tax on a increase in the funds unit price , what is the position tax wise if the funds unit price goes down? Could anyone advise me what benifits are there for investing in accumulation funds?. :T

Richard_DandR

This thread explains how accumulation shares work.

http://forums.moneysavingexpert.com/showthread.html?t=1579147

So the amount of the accumulation is taxable just like the distribution on income shares. Basic rate tax payers shouldn't have a further tax liability though.

However, do remember to add the accumulation to your original cost when calculating your capital gain when you sell (if you are lucky to have made sufficient gains).

justacannycodger

Thank u for the info & web attach,

Cheers:beer: