Suggestion for SIPP/ISA and unwrapped?

hparker

Tom99 wrote: »

No because you will get an equalisation payment on the next dividend date. The equalisation payment is not a personal calculation but an average for all the new investments in that particular fund, so whether you buy on the ex-div date or the day before the ex-div date it will be the same.

But perhaps a reason for choosing Inc Funds in the ISA and SIPP is that you will not get a tax certificate for the ISA and SIPP, so if you hold Acc Units you will have to do a lot of homework to establish the dividend for your overseas tax return.

And also if you buy on the 1st day after the ex-div date?

Does the equalisation payment increase or decrease the amount of tax due in that financial tax year? Is it income, and if so is it received as dividend or capital and does it adjust the tax calculation for dividend income, or capital gains?

Tom99

hparker wrote: »

And also if you buy on the 1st day afterthe ex-div date?

Does the equalisation payment increase or decrease the amount of tax due in that financial tax year? Is it income, and if so is it received as dividend or capital and does it adjust the tax calculation for dividend income, or capital gains?

[FONT=Verdana, sans-serif]No its not income, its return of capital. How you treat the equalisation payment depends, but if outside ISA/SIPP:[/FONT]
[FONT=Verdana, sans-serif]Acc Units – Ignore for both income tax and CGT[/FONT]
[FONT=Verdana, sans-serif]Inc Units – deduct from base cost for CGT, ignore for income tax.
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[FONT=Verdana, sans-serif]The equalisation payment will be the same, it does not matter when in the 1st dividend period you make the purchase. If the Fund is a large one, with many purchase deals, you would expect the 1st payment to be approx 50% equalisation and 50% income.
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