Tax on Accumulator foreign ETF

John464

I have some units in SWDA iShares Core MSCI World UCITS ETF USD (Acc) outside my ISA
The dividends are not shown by my platform as they are Accumulators.
I think I know how to work out the dividends. (get it from the ishares website and convert it to £ using the HMRC currency conversion tables)
What I would like to know please is if these are liable to dividend tax in UK where I am domiciled?
Since they are registered outside the UK  (in Eire) 
So do I need to put them on my self assessment and pay UK dividend tax on them?
(I think I do but just wanted to be sure in case I have got it wrong)

Alexland

The tax position is the same regardless of if you hold an accumulation or income ETF.

https://monevator.com/income-tax-on-accumulation-unit/

The data for the HMRC reportable income for tax purposes is usually on the fund managers website if you have a dig around.

https://www.gov.uk/tax-on-dividends

John464

Alexland said:

The tax position is the same regardless of if you hold an accumulation or income ETF.

https://monevator.com/income-tax-on-accumulation-unit/

The data for the HMRC reportable income for tax purposes is usually on the fund managers website if you have a dig around.

https://www.gov.uk/tax-on-dividends

Thanks for the reply Alexand
Does it make any difference to the tax position the fund being domiciled in Eire?
(Just realised I have posted this in the wrong forum as its outside an ISA)

Alexland

John464 said:

Does it make any difference to the tax position the fund being domiciled in Eire?

No, provided they are still doing HMRC approved reporting that's fine. If they don't it gets difficult as there are rules around offshore income gains to prevent investors using an accumulation fund to avoid receiving dividends and then trying to claim it is only a capital gains event on disposal.

masonic

Alex has alluded to it already, but don't forget to include Excess Reportable Income as well as the declared dividend. This is applicable to distributing ETFs as well as accumulating ones, if they are non-UK domiciled.

John464

Thanks for the replies
I don't understand 'Excess Reportable Income' but the ishares document lists it as zero for my SWDA ETF units so I ignored it.

(I have since asked on the Savings and Investment forum when I realised I had posted on this wrong one as its not about tax free savings. https://forums.moneysavingexpert.com/discussion/6230102/tax-on-dividends ) 

masonic

John464 said:

Thanks for the replies
I don't understand 'Excess Reportable Income' but the ishares document lists it as zero for my SWDA ETF units so I ignored it.

You can read about Excess Reportable Income here: https://monevator.com/excess-reportable-income/
If it is zero then it can be ignored, but if it becomes non-zero in a future year then it must be declared as dividend income.

Delburn

Where are you getting zero excess reportable income from?
I have:
Ishares report for year ending 30/6/2019, IE00B4L5Y983
https://www.ishares.com/uk/individual/en/literature/tax-information/ishares-iii-participant-report-2019-emea.xls

Actual distributions zero as it is an accumulation fund. Excess reportable income = $1.0685 for each share held on 30/6/2019.  This is deemed to be paid on 31/12/2019, so must be declared to HMRC as foreign dividend income in tax year 2019/20. Ishares report for year ending 30/6/2020, IE00B4L5Y983 https://www.ishares.com/uk/individual/en/literature/tax-information/ishares-iii-participant-report-2020-emea.xls Actual distributions zero as it is an accumulation fund. Excess reportable income = $0.9792 for each share held on 30/6/2020.  This is deemed to be paid on 31/12/2020, so must be declared to HMRC as foreign dividend income in tax year 2020/21.

John464

Delburn said:

Where are you getting zero excess reportable income from?
I have:
Ishares report for year ending 30/6/2019, IE00B4L5Y983
https://www.ishares.com/uk/individual/en/literature/tax-information/ishares-iii-participant-report-2019-emea.xls

Actual distributions zero as it is an accumulation fund. Excess reportable income = $1.0685 for each share held on 30/6/2019.  This is deemed to be paid on 31/12/2019, so must be declared to HMRC as foreign dividend income in tax year 2019/20. Ishares report for year ending 30/6/2020, IE00B4L5Y983 https://www.ishares.com/uk/individual/en/literature/tax-information/ishares-iii-participant-report-2020-emea.xls Actual distributions zero as it is an accumulation fund. Excess reportable income = $0.9792 for each share held on 30/6/2020.  This is deemed to be paid on 31/12/2020, so must be declared to HMRC as foreign dividend income in tax year 2020/21.

Thanks for the reply
You are right
I was having a Senior Moment
Its the Disribution that is zero

John464

Next problem is what exchange rate to use to change $ to £
I googled the rate on the day
Lots to choose from there
But then I saw HMRC publish conversion tables, so thought thats the way to go
BUT - they do a monthly average and a yearly average
https://www.gov.uk/government/publications/hmrc-exchange-rates-for-2018-monthly
So now I have 3 different rates
Anyone know which rate to use please?

Alexland

John464 said:

Anyone know which rate to use please?

I would be tempted to use the HMRC published monthly rate but you might want to call them to be sure.