£50 Cashback with NatWest or RBS Invest

Asghar

Would the £50 cachback also count as profit?

So if the £250 investment were to grow to £300 then with the cashback it would make £350 before selling. Then on your self assessment would you simply enter a Capital Gains amount of £100, minus the platform fee?

Just read more info on the Natwest webite and the £50 cashback is paid into the current account. So would then the Capital Gain be £50 and the cashback count as interest?

colsten

Cashback is never taxable. The £50 is cashback.

ischris85

What would we do without colsten and others on this forum

bigadaj

colsten said:

quirkydeptless said:

Worth a punt for £50

I want to invest in a GIA and get my payment in dividends as I've plenty of slack in the tax free allowance there, but I can run close to the £1000 tax free allowance for the interest along with my savings, although the plummeting rates are making that one easier too 

Not sure where the break would be for interest/dividend payment though, i.e. lowest risk one will be interest, the 2nd highest risk one which looks like it might break the 60% bonds and be an interest payer payer so not sure, other 3 would be divis.

All the NatWest Funds are "Accumulating", there is no "Income" option, so you won't see any dividend or other payment. Whichever of their risk options / Funds you choose, your return won't be a split of interest and dividend but it will be the change in Fund value. Hopefully this will be a positive change but it could be a negative, or no, change.


Your taxable gain will be any positive difference between the price you bought your units in the Fund, and the price you sell them at, whenever you sell them. This is why you need to keep detailed records if you invest outside an S&S ISA.


Your PSA won't be in any way affected by any gain for those Natwest/RBS investments. If you make a profit when you sell, it counts as Capital Gain and is subject to Capital Gains Tax if your total Capital Gains exceed your Capital Gains Tax allowance, which is £12,300 this financial year. Just for completeness, I should also mention that you cannot claim any tax relief if your investments make a loss.

That's not fully correct. Accumulation funds will be a combination of dividends (distribution) and capital growth, so partially attributable to income and partially to capital gains. The fund will give a breakdown of the split on the tax certificate at the end of the tax year, but over multiple years it can be quite fiddly recording or working out what is income/ distribution and what is capital growth so it's often recommended to hold income units outsde a tax wrapper to make records and tax calculations easier.

colsten

bigadaj said:

colsten said:

quirkydeptless said:

Worth a punt for £50

I want to invest in a GIA and get my payment in dividends as I've plenty of slack in the tax free allowance there, but I can run close to the £1000 tax free allowance for the interest along with my savings, although the plummeting rates are making that one easier too 

Not sure where the break would be for interest/dividend payment though, i.e. lowest risk one will be interest, the 2nd highest risk one which looks like it might break the 60% bonds and be an interest payer payer so not sure, other 3 would be divis.

All the NatWest Funds are "Accumulating", there is no "Income" option, so you won't see any dividend or other payment. Whichever of their risk options / Funds you choose, your return won't be a split of interest and dividend but it will be the change in Fund value. Hopefully this will be a positive change but it could be a negative, or no, change.


Your taxable gain will be any positive difference between the price you bought your units in the Fund, and the price you sell them at, whenever you sell them. This is why you need to keep detailed records if you invest outside an S&S ISA.


Your PSA won't be in any way affected by any gain for those Natwest/RBS investments. If you make a profit when you sell, it counts as Capital Gain and is subject to Capital Gains Tax if your total Capital Gains exceed your Capital Gains Tax allowance, which is £12,300 this financial year. Just for completeness, I should also mention that you cannot claim any tax relief if your investments make a loss.

That's not fully correct. Accumulation funds will be a combination of dividends (distribution) and capital growth, so partially attributable to income and partially to capital gains. The fund will give a breakdown of the split on the tax certificate at the end of the tax year, but over multiple years it can be quite fiddly recording or working out what is income/ distribution and what is capital growth so it's often recommended to hold income units outsde a tax wrapper to make records and tax calculations easier.

Well that's news to me but I admit I don't have 1st hand experience since I don't hold any unwrapped investments.

I am at a loss though why you would hold income units outside a tax wrapper if all it means more complicated record keeping and calculations than if you used a tax wrapper. I would understand if you did it because you ran out of tax wrapper space but that's a problem most people wouldn't have, or have had in the last decade or two.

colsten

The ultimate answer to taxing income from the Natwest  Funds: https://personal.natwest.com/personal/investments/natwest-invest/how-are-my-investments-taxed.html

bigadaj

colsten said:

bigadaj said:

colsten said:

quirkydeptless said:

Worth a punt for £50

I want to invest in a GIA and get my payment in dividends as I've plenty of slack in the tax free allowance there, but I can run close to the £1000 tax free allowance for the interest along with my savings, although the plummeting rates are making that one easier too 

Not sure where the break would be for interest/dividend payment though, i.e. lowest risk one will be interest, the 2nd highest risk one which looks like it might break the 60% bonds and be an interest payer payer so not sure, other 3 would be divis.

All the NatWest Funds are "Accumulating", there is no "Income" option, so you won't see any dividend or other payment. Whichever of their risk options / Funds you choose, your return won't be a split of interest and dividend but it will be the change in Fund value. Hopefully this will be a positive change but it could be a negative, or no, change.


Your taxable gain will be any positive difference between the price you bought your units in the Fund, and the price you sell them at, whenever you sell them. This is why you need to keep detailed records if you invest outside an S&S ISA.


Your PSA won't be in any way affected by any gain for those Natwest/RBS investments. If you make a profit when you sell, it counts as Capital Gain and is subject to Capital Gains Tax if your total Capital Gains exceed your Capital Gains Tax allowance, which is £12,300 this financial year. Just for completeness, I should also mention that you cannot claim any tax relief if your investments make a loss.

That's not fully correct. Accumulation funds will be a combination of dividends (distribution) and capital growth, so partially attributable to income and partially to capital gains. The fund will give a breakdown of the split on the tax certificate at the end of the tax year, but over multiple years it can be quite fiddly recording or working out what is income/ distribution and what is capital growth so it's often recommended to hold income units outsde a tax wrapper to make records and tax calculations easier.

Well that's news to me but I admit I don't have 1st hand experience since I don't hold any unwrapped investments.

I am at a loss though why you would hold income units outside a tax wrapper if all it means more complicated record keeping and calculations than if you used a tax wrapper. I would understand if you did it because you ran out of tax wrapper space but that's a problem most people wouldn't have, or have had in the last decade or two.

It may be news to you but what you report needs to be correct.
You misunderstand about holding income units, this makes it simpler not more complicated. Income units don't aggregate the distribution and capital elements, so in future years when you calculate capital gains it is a simple matter of buy minus sell price. Just because you don't run out of tax wrapper doesn't mean that other people won't, many people might come into money that exceeds the amounts they can isa or put into pension, and may then look to bed and isa or put into a pension in subsequent years. Pension obviously means locking away money for years or even decades for many people.
The other issue is that you wouldn't want to use your isa  on an offer like this as like most banks investments charges are relatvely high, so you'd either lose out in terms of overall costs and charges or miss out on investing much of your isa for that year.
I've utiised offers on robo platforms over the last few years and contributed minimums to qualify for an offer but only on gia accounts for the reasons above. In those cases I've had to report small amounts of distribution on my tax return, though I do still hold unwrapped investments outside these offers. The other issue is that bond heavy investments, in theory lower risk in most cases, are reportable as interest rather than dividends so people need to ebe aware what their investments consst of,

quirkydeptless

colsten said:

The ultimate answer to taxing income from the Natwest  Funds: https://personal.natwest.com/personal/investments/natwest-invest/how-are-my-investments-taxed.html

Thanks, should have noticed that.

It answers my question exactly, portfolios 1 and 2 are interest, and portfolios 3, 4 and 5 are dividend.

kaMelo

michaels said:

Has anyone tried signing up to both yet?

Yes, though both still in the processing stage at the moment. 

ischris85

I have initiated a S&S ISA.  I note they state it takes two working days to setup. I can't see anywhere that monthly contributions need to be £50/the total investment needs to be equal to or greater then £250 as at 31.10.2020 to be eligible for the £50 cashback.