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Avoiding receiving a fund dividend
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Generally the manager will decide up front if they are going to attempt to keep the fund within the investment concentration needed for interest treatment on distributions. For example "Vanguard Lifestrategy 40% Equity" is going to be generally 'about' 60% bonds but rather than mess about keeping very carefully on the right side of the borderline they just have normal dividend treatment while their 20% equity, 80% bonds variant within the same product range has interest treatment for distributions.
The prospectus for Royal London Bond Funds II ICVC (the umbrella fund of which "Royal London Short Duration Credit" is a part) says in their UK tax section:Funds with 60% or less of their investments throughout the year in interest bearing (and economically equivalent) investments are referred to below as “equity” funds. Funds with over 60% of their investments throughout the year in interest bearing investments are referred to below as “bond” funds.
All the Funds are Bond Funds.
Bond Funds: Income allocations to Shareholders are classified as interest distributions. (The only exception to this would occur in the event that a Fund failed to qualify as a bond fund for a distribution period and becomes an equity fund in which case its distribution for that period would be classified as a dividend distribution and be taxable as a dividend and not as interest. This is not expected to occur).1
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