Iii

sorcerer

I have seen those group 1 and group 2 things on AJ Bell, so I don't think it's a II thing as such. I recall reading something quite complicated about how and when Tax Credits get to you, and sometimes they are rolled into the dividend price. But I really can't remember the details unfortunately.

sorcerer

I found this it might help a little.


(iii) Equalisation is accrued income included in the price of units/shares (Group 2 units/shares)
purchased during the period. It should be deducted from the cost of units/shares for capital gains tax
purposes and is not subject to income tax.
(iv) Group 2 units/shares are the units/shares purchased during the distribution period and which were
held at close of business on the period end date. They may constitute all or part of your total holding.
Group 1 units/shares are those purchased prior to the distribution period.

masonic

juliamarsh wrote: »

However, correct me if I am wrong but what I understand from it is that the portion of the dividend for the part of the month before you buy the units is paid as equalisation from capital but the portion for the part after you made the purchase is paid as actual dividend, therefore surely that part is eligible for tax relief. The fund pays its dividends on the 25/26th of each month and I bought my holding on 29th July. Therefore should I not be eligible for a tax credit on the part from 29th July - 25th August? Unless the dividend that becomes payable 25th August is actually based on the previous month, before I bought them. Complicated - perhaps I had better ask Fidelity and make sure I get my facts straight!:)

I agree with you that there seems to be an eligibility for a credit for that interest which accrued after you bought your holding, so it is worth pressing the issue, but you may find there is something in the T&Cs or guidance from HMRC around this.

juliamarsh

I have tried to have a look online but haven't managed to find any info. I know I shouldn't automatically assume that III must be in the wrong but it's hard not to when they usually are!;) If it had been HL I would probably have accepted their explanation because I have far greater trust in them to know what they are doing. In fact I am awaiting a response from HL to a message I sent them a few days ago, so perhaps tomorrow I will phone to chase them for a response, and whilst I am on the phone I might just pick their brains on the tax reclaim issue....will report back!

sorcerer

juliamarsh wrote: »

I have tried to have a look online but haven't managed to find any info. I know I shouldn't automatically assume that III must be in the wrong but it's hard not to when they usually are!;) If it had been HL I would probably have accepted their explanation because I have far greater trust in them to know what they are doing. In fact I am awaiting a response from HL to a message I sent them a few days ago, so perhaps tomorrow I will phone to chase them for a response, and whilst I am on the phone I might just pick their brains on the tax reclaim issue....will report back!

And I totally agree with you 99% of the time it's the fault of II for screwing up something, but in this case I'm not sure it's the fault of II.

juliamarsh

sorcerer wrote: »

And I totally agree with you 99% of the time it's the fault of II for screwing up something, but in this case I'm not sure it's the fault of II.

No, for once I don't think it is, but I'm sure everyone can understand why I jumped to that conclusion!!:D It is only a very small amount of money anyway so no great shakes although obviously it could be an issue with a bigger transaction.

Jerry2014

I've only just found this thread. I also transferred from HL to iii last April before HL raised their charges to 0.45% on ISA funds.

My experience of iii has been mixed. Not perfect by any stretch, but not as bad as some here.

Recently I have been weighing up whether iii are best for me (hence coming across this thread). I have the option to leave free of charges in the first year if I am not satisfied with their service (as do all new customers).

The transfer in took a good while, but not unacceptable. The 'transfer in' offer of free trading credits I had to chase several times. This was annoying.

Then in mid November I had a problem with another transfer in which was applied to my account and then removed before it was returned. The communication and explanation I received was nonsense. I am still waiting for my complaint to be resolved.

When i have contacted iii by telephone the quality of the assistance is variable.

The HL service was much more efficient, although I found them 'high handed' on the phone. However HL are very expensive, so they should be good.

Because I can link my partner's account and pay just £80pa to iii we will have saved at least £1300 in fees over staying with HL over 12 months. £1300 is a lot of money.

For a small portfolio, say 1 or 2 full years ISA allowance (£30k) I would pick HL over iii. The problem arises when you've been doing this a few years and your portfolio is attracting significant charges on a percentage basis (0.45%) then HL become very unattractive. I think there are many more changes to come to fund platforms over the next few years. I also hope the FCA will abolish exit charges or cap them.

I'm undecided about whether to stay with iii. The next 3 months will be key.

xylophone

I have tried to have a look online but haven't managed to find any info. I know I shouldn't automatically assume that III must be in the wrong but it's hard not to when they usually are! If it had been HL I would probably have accepted their explanation because I have far greater trust in them to know what they are doing. In fact I am awaiting a response from HL to a message I sent them a few days ago, so perhaps tomorrow I will phone to chase them for a response, and whilst I am on the phone I might just pick their brains on the tax reclaim issue....will report back!

HL say

`'When you buy a fund between income payment dates, the price you pay includes any income that has been received by the fund since the last payment date and this is rolled up in the price you pay. From your tax perspective this is capital and not income, since you did not hold the units when the income was earned. Therefore the fund manager will reimburse you that part of your capital rather than paying all income in the first income payment. This will reduce your cost figure. It is called an equalisation payment.'

If the accrued income (repayment of capital)Group 2 units are not subject to income tax, then there is no tax to reclaim?

xylophone

Well, no sign of my Invesco Perpetual dividend- the latest I have had it since moving to II is 13th of the month following payment - see where we are next Tuesday...... This is disappointing since it has turned up as early as the 3rd.

My relative has phoned II again today but it's the same old story about ten working days etc - my relative says that he asked who has the use of his money while he hasn't, but the young man on the phone said that he didn't have that information.....

We are agreed that it seems incomprehensible that they get payment on time (or near it) some months but not others, and it's not even the same funds each time.

The most consistent payer is Premier Monthly income - they seem to be able to pay this very close to payment day...

Mystifying!

masonic

xylophone wrote: »

If the accrued income (repayment of capital)Group 2 units are not subject to income tax, then there is no tax to reclaim?

No question of that, but what about the income accrued between the date you bought the units and the ex-dividend date? That isn't capital as it hadn't accrued at the time the units were bought.

For example, say a fund had a dividend payment dates of 30th April (XD 15th April), 31st July (XD 15th July), etc. and you bought the fund on 15th May. Any income accruing between 15th May and 15th July, which would presumably be paid in the July dividend should be eligible for a tax credit, should it not?

Edit: or does the July payment in this example only include dividends accrued in the previous quarter and hence its value is unchanges during the whole period?