Income or accumulation units?

barak

donniej wrote: »

Some providers offer switching for income to accumulation units at no charge. It's known as a unit conversion; you're not actually selling out of the fund or buying units, you want your existing units to be in the income rather than the accumulation share class.

It might be worth phoning HL and asking if they will do this for you.

I think that's only possible if you have bought units direct from a fund manager. I certainly did it years ago, but I doubt whether you can do it using an IFA or other intermediary.

dunstonh

barak wrote: »

I think that's only possible if you have bought units direct from a fund manager. I certainly did it years ago, but I doubt whether you can do it using an IFA or other intermediary.

You can do it on some platforms available via IFAs.

gterr

donniej wrote: »

Some providers offer switching for income to accumulation units at no charge. It's known as a unit conversion; you're not actually selling out of the fund or buying units, you want your existing units to be in the income rather than the accumulation share class.

It might be worth phoning HL and asking if they will do this for you.

I did check with HL and for the Vanguard Lifestrategy funds I would have to sell the accumulation units and buy income units: I could not switch between the two types. Maybe, when the time comes to take an income from my ISA I would want to move into different funds anyway.

kidmugsy

I don't see the point of intending to hold income units when what you want to do is withdraw money from the SIPP. You can just sell enough accum units to release the money you want. Within a SIPP where there is neither CGT nor income tax to pay, there is little point trying to distinguish income from capital. It's all just money or money's worth, and money is fungible.

Maybe there are some second-order effects to consider, perhaps some small detail of costs, but there is no first-order distinction worth making between income and capital.

dunstonh

The yield on the vanguard LS funds isnt great anyway. So, sale of units is likely to be needed unless you plan to segment the portfolio to cater for different periods rather than use yield.

barak

dunstonh wrote: »

You can do it on some platforms available via IFAs.

I didn't know that. It could be useful at times, especially if you decide you want to receive the income. I still have both Inc and Acc units in a couple of funds which originally only had Inc units.

I don't suppose it's possible on FidelityFN? I think I once asked them.