Vanguard GIA - How to calculate CGT and Income tax on accumulation index tracker funds?

gundo

Pretty much as it says in the title, I have a general investment account (GIA) alongside my S&S ISA and SIPP. In my GIA I have funds such as:

- LifeStrategy 60% Equity Fund - Accumulation
- LifeStrategy 80% Equity Fund - Accumulation
- FTSE Global All Cap Index Fund Accumulation
- U.S. Equity Index Fund - Accumulation.

How do I calculate the Capital Gains Tax (CGT) and Income tax for these when I move 20K out of the GIA into my S&S ISA come next April? I know that it's tricky as they're accumulation funds so any dividends get automatically re-invested. I have the S&P 500 UCITS ETF (VUSA) as well and I can see that the dividends for this are now in the GIA as cash so that's easy to declare as Income.

Any help gratefully received e.g. useful webpages about this etc.

ColdIron

Dividends are easy, they will be declared for the previous tax year on the Tax Certificate they provide you with. You have an 'allowance' of £2,000 charged at 0%

Capital Gain is the difference between what you bought them for and the proceeds of sale. You can deduct trading fees and stamp duty. Hope you kept good records or your Contract Notes. Again you have an 'allowance' or Annual Exempt Amount of £12,300. You would be doing well to exceed this on a £20,000 sale

eskbanker

Unwrapped accumulation investments also need to account for equalisation, which is discussed on numerous threads on here, including:

https://forums.moneysavingexpert.com/discussion/6161908/struggling-with-the-concept-of-equalisation

Linton

With ACC funds when you calculate the Capital Gain you must deduct the dividends portion since that would have already been taxed separately.

The tax calculations are much easier with INC funds and I understand some investors choose INC funds over ACC funds for that reason.  That is also a good reason to use ISAs even if you would not be paying tax,

ColdIron

eskbanker said:

Unwrapped accumulation investments also need to account for equalisation, which is discussed on numerous threads on here, including:

https://forums.moneysavingexpert.com/discussion/6161908/struggling-with-the-concept-of-equalisation

My understanding is that for Acc units you can ignore equalisation (as it was not paid out as a return of capital but retained within the fund so did not reduce the cost of aquisition) but must account for dividends. Conversely for Inc units you can ignore dividends but must account for equalisation. Bowlhead alludes to this in his post in your link

SonOf

When you get the opportunity, switch them to inc units. Much easier to deal with when unwrapped.

eskbanker

ColdIron said:

eskbanker said:

Unwrapped accumulation investments also need to account for equalisation, which is discussed on numerous threads on here, including:

https://forums.moneysavingexpert.com/discussion/6161908/struggling-with-the-concept-of-equalisation

My understanding is that for Acc units you can ignore equalisation (as it was not paid out as a return of capital but retained within the fund so did not reduce the cost of aquisition) but must account for dividends. Conversely for Inc units you can ignore dividends but must account for equalisation. Bowlhead alludes to this in his post in your link

Perhaps I misunderstood - that thread did seem to cover a fair bit of reversing out misleading data presentation by the platform!

ColdIron

Yes, I think the thrust of it was the attempt by HL to be helpful but only served to confuse