Nutmeg General Account Tax Reporting

jkwer521

Does anyone have any experience of the tax report from a Nutmeg general investment account?

I am thinking of opening one, but I don't want to overcomplicate my tax affairs. At the moment I don't have to file a tax return and I would rather not have to.

On their site, they talk about dividends classed as income, dividends classed as interest, excess income and bank interest - would any of these would result in having to file a tax return. I'm especially not clear about "excess income".

AnotherJoe

Is there some reason you can't have an ISA ? Maxed out ?

jkwer521

Yes, ISA maxed out

dunstonh

And will it be maxed out next tax year?

jkwer521

Yes, will be maxed out on 6 April, but will have spare income throughout the year. I'm holding off opening a general investment account until at least 6 April so I know it won't affect my tax this year

dunstonh

Basically, if you are making multiple investments within a GIA then each investment fund is a single asset. Not the GIA itself. You will need a record of the purchases and sales. If bought on multiple dates, you will need to aggregate the purchases for CGT (under section 104). It's best to buy income units if you can otherwise you will also need to keep a record of any income distributed within the fund itself if you use ACC units.

The above sounds complicated but its not if you have the data and your chosen investment platform supplies the data and offers inc units instead of acc units.

jkwer521

Thanks - it seems like I will have to do a tax return as a result then. Is this the case even if returns are below the relevant thresholds (eg CGT, dividends)?

With Nutmeg, I don't think you can choose inc or acc units, but they do aggregate the data and provide it to you each year.

ValiantSon

jkwer521 wrote: »

Thanks - it seems like I will have to do a tax return as a result then. Is this the case even if returns are below the relevant thresholds (eg CGT, dividends)?

With Nutmeg, I don't think you can choose inc or acc units, but they do aggregate the data and provide it to you each year.

You don't need to do a tax return if your dividends income is below the allowance threshold, i.e. £2,000 from 6th April. You also don't need to for all dividend income above that level either. I cannot find the new bands, but this year you didn't need to do a return for dividend income between £5,000 and £10,000, but you did need to let HMRC know so they could claim the tax from you.

You don't need to complete a tax return for CGT if the gain is within your allowance.

GT85

I believe you need to declare, if outside of a tax wrapper, you dispose (sell) 4x the CGT allowance (£11,300*4 = £45,200). As this is my first year, I stand to be corrected on this however!

ValiantSon

GT85 wrote: »

I believe you need to declare, if outside of a tax wrapper, you dispose (sell) 4x the CGT allowance (£11,300*4 = £45,200). As this is my first year, I stand to be corrected on this however!

Yes, I should have added that! Thank you.

dales1

Bowlhead explains here that you don't need to do a tax return if no CGT is payable (and for that reason alone).

The £45k threshold is only for people who already must fill out a tax return, and so must declare their transactions above £45k.

bowlhead99 wrote: »

Then in that case they didn't 'forget' about the "four times" limit. The four times limit is relevant if you have to fill out a tax return, because then you have to follow the rules for properly completing a tax return, which include disclosing your sales proceeds and gains/losses where the proceeds are >4x that year's exemption even if the gains are under the exemption and you're not bothered about claiming the losses.

However, if you don't have to fill out a tax return, you don't need to tell them about your gains and losses if the gains are less than the exemption and you don't want to claim any losses.