Vanguard Life Strategy

gadgetmind

guitarman001 wrote: »

What happens to dividend tax... If I automatically re-invest into my lifestyle fund.... Do I get a dividend statement for this, then at the end of the year simply hand to hmrc this value multiplied by 22.5%?

There is no tax to pay on dividends received in a SIPP (or ISA) so absolutely nothing to report to HMRC.

The situation for income and gains on funds held outside of SIPPs and ISAs is *very* complicated, so please don't go this route as I certainly CBA to try and explain it!

guitarman001

Oh! I thought even shares in an is a were subject to 10% tax - I got that wrong then!
By the way I saw your comments on monevator - good site! Any others you recommend?

gadgetmind

guitarman001 wrote: »

Oh! I thought even shares in an is a were subject to 10% tax - I got that wrong then!

Dividends come with a notional 10% tax deducted already, which can't now be reclaimed anywhere, but can be offset against the tax due on dividend income when the shares are held unwrapped. This 10% also needs to be applied to taxable dividend income to see whether tax is due - if you earn £9 in dividends, you add £10 to your income to see what tax is due, and then apply the 10% credit (bearing in mind that tax rates for dividend income are lower than for earned income).

It used to be that you could reclaim the 10% in tax sheltered accounts, but this was stopped many years ago.

By the way I saw your comments on monevator - good site! Any others you recommend?

I also loiter around the Motley Fool forums. The forum software is deeply nasty, but there are many very informed posters there, some of whom clearly have far too much time on their hands!

I mainly hang around the HYP, income, banking and bond boards.

bluebell321

Can someone explain this to me?
VLS ( ACC version) in ISA.
Platform shows current price , current value and cost value. Up until the last time I looked, the cost value was exactly how much I paid in as I would expect.
Now it is a little less than what I paid in. Why is this? Is it something to do with being past the dividend payment date?
I thought the Acc version just had the unit price adjusted.

Archi_Bald

Probably charges.

ColdIron

Are you with HL? They can reduce the amount you paid with an equalisation payment and credit it to your cash account. You haven't gained or lost it's just accounting, see link under Income and Dividends

http://www.hl.co.uk/funds/fund-faqs

bluebell321

Yes it is HL.

Charges are paid by debit card so it should not be that.

Cash account is nil.

I really don't understand it. Same thing has happened to OH's account also.

It means that the percentage gain/loss is no longer meaningful.

ColdIron

It should be accounted for somewhere, click the Code column in your Stock listing on the left or in the Transaction History tab

bluebell321

ColdIron wrote: »

It should be accounted for somewhere, click the Code column in your Stock listing on the left or in the Transaction History tab

Thanks. I think you are on the right lines. It says 31/5 corporate action and a - figure that fits but I still don't understand.

the % gain/loss will no longer be accurate as it now appears that it cost me less in the first place


Also, how can you tell what the exact dividend was for this year with the acc version? Surely the unit price includes capital gain and income so difficult to tell. Not so important for an ISA but would be for a fund and share account.

ColdIron

They are called Corporate Actions in some places on HL's site but technically these payments aren't true CAs. The gain/loss is still accurate as the amount you really paid into the fund has been adjusted, it's usually paid into your income account not the capital one

When HL takes charges from you they debit your accounts in a particular order and I suspect that it was used and reduced your charge. You should be able to track it down under the Income tab on the Transaction History tab

BTW how did you get HL to take charges by debit card without it counting towards your ISA allowance? I thought that with the new charges they sell some of your holdings if there is not sufficient cash in your accounts or Fund and Share account