Paying Interest or Dividends?

Slim

Is there anywhere on the internet which identifies whether particular funds make distributions after deduction of a tax credit or 20%?

Obviously within a PEP/ISA or Pension fund only if 20% is deducted at source can tax be reclaimed.

Particularly ETFs such as Barclay's ishare Sterling Corporate Bond Fund and eg Fidelity Unit Trust MoneyMarket type accounts do these fall within the 20% regime?

Thanks

noh

ishare ETFs are registered in Dublin and no tax is witheld from the payment so in an ISA there is nothing to reclaim http://www.ishares.net/investing/tax_considerations.do
If you are refering to corprate bonds that are UK registered from Fidelity or any other provider then 20% tax is usually witheld and should be reclaimed by the ISA provider.

Nigel

EdInvestor

Slim wrote: »

Is there anywhere on the internet which identifies whether particular funds make distributions after deduction of a tax credit or 20%?

A dividend distribution from an equity fund comes with a 10% tax credit: this covers the liability for basic rate taxpayers,nothing further to pay. HR have to pay a further 25% via their tax return. The tax credit is not reclaimable ( as nothing has been paid).

Distributions from property and bond funds would attract 20% tax, payable via tax return.

No taxes payable on anything in or coming out of an ISA.

Slim

Thanks Noh

There are therefore three categories of tax deduction from funds' distributions -
a) No tax deduction (certain Dublin based ishare distributions)
b) Notional dividend tax credit, and
c) 20% tax deducted.

Obviously pension/ISA/Pep investments, all other things being equal, should go for funds paying in categories a) and c). The majority of funds will fall into category b) because of their investments but it would still be nice to see somewhere a list of category a) and c) funds.