What records do I need to keep for unwrapped investments?

stringer_bell

Hello All,

29 years old, self employed.. Just went to a LTD company, so I can take dividends tax efficiently. I have a lot of cash savings, pension maxed out, cash isa maxed and s&s Isa maxed. I was thinking of putting maybe 1000-2000 a month into an investment account as I have a bit of knowledge investing now

Do I have to keep records on my investments on unwrapped isa's? If so, is it complicated? I was thinking about buying trackers/funds for growth, I won't be taking income as I do not need it. If it's a lot of hassle I don't think I will bother

grey_gym_sock

for income, if you use a nominee account, the provider should give you a consolidated statement at the end of the tax year.

for capital gains, you want to keep the contract notes for every purchase and sale.

it is probably best to avoid using accumulation units of funds, because that complicates the capital gains, since you are effectively investing a little more cash every time you aren't paid a dividend.

IronWolf

You should make sure you have records of the cost and sale of each investment (per unit as well) and records of the cash distributions you get from them in dividends.

Most online brokers will keep this information for you automatically and at the end of the year you can just print off a statement.

When realising capital gains you will also need to record which 'purchase' you are using (if you bought the same thing more than once over time) so that you don't use the same one again.

stringer_bell

grey_gym_sock wrote: »

for income, if you use a nominee account, the provider should give you a consolidated statement at the end of the tax year.

for capital gains, you want to keep the contract notes for every purchase and sale.

it is probably best to avoid using accumulation units of funds, because that complicates the capital gains, since you are effectively investing a little more cash every time you aren't paid a dividend.

so, in your opinion, what would be the easiest way to invest, I don't need the income and investing in the funds sounds like a ton of hassle

stringer_bell

IronWolf wrote: »

You should make sure you have records of the cost and sale of each investment (per unit as well) and records of the cash distributions you get from them in dividends.

Most online brokers will keep this information for you automatically and at the end of the year you can just print off a statement.

When realising capital gains you will also need to record which 'purchase' you are using (if you bought the same thing more than once over time) so that you don't use the same one again.

I'm using HL, do they have keep the information automatically?

IronWolf

stringer_bell wrote: »

I'm using HL, do they have keep the information automatically?

I've never used them but I would be shocked if they didn't.

One thing I would look out for is that if you ever change broker make sure to print off all your statements first because once your account is gone, so too are the statements usually.

grey_gym_sock

stringer_bell wrote: »

so, in your opinion, what would be the easiest way to invest, I don't need the income and investing in the funds sounds like a ton of hassle

well, i'd buy income units of funds, even though you don't need the income. as a result, you'll build up cash more quickly, so you can make a further investment a bit sooner than you would otherwise have done.

and i'd ask for the income to be paid out into my current account (though you could leave it with the platform). when i have too much in my account, i move some to a savings account. when there's too much in there, i could make a new investment.

stringer_bell

grey_gym_sock wrote: »

well, i'd buy income units of funds, even though you don't need the income. as a result, you'll build up cash more quickly, so you can make a further investment a bit sooner than you would otherwise have done.

and i'd ask for the income to be paid out into my current account (though you could leave it with the platform). when i have too much in my account, i move some to a savings account. when there's too much in there, i could make a new investment.

Wouldn't that have a knock on effect on my income and tax position? Especially with taking dividends from my company. I think it would be easier to just leave it with the platform

grey_gym_sock

yes, if you're trying to pay yourself enough dividends that you don't quite reach higher rate tax, then you need to take dividends from unwrapped investments into account.

but this applies regardless of whether the money is paid out or left with the platform. it becomes taxable when the fund pays it.

(and incidentally, the same would apply with accumulation units. they don't make income tax simpler, compared to income units. they just make capital gains tax more complicated.)

stringer_bell

grey_gym_sock wrote: »

yes, if you're trying to pay yourself enough dividends that you don't quite reach higher rate tax, then you need to take dividends from unwrapped investments into account.

but this applies regardless of whether the money is paid out or left with the platform. it becomes taxable when the fund pays it.

(and incidentally, the same would apply with accumulation units. they don't make income tax simpler, compared to income units. they just make capital gains tax more complicated.)

ah ok, i have this all confused then. I always got impression it would become taxable when I sold them

stringer_bell

so let me get this straight, let's say I had 100k invested outside an ISA, and it grew by 30 percent over the year, I would still have to pay CGT even if I didn't sell it?