Taxation of funds outside a wrapper

A_T

Say I hold Fidelity Index World Acc within a investment account (i.e. not ISA or SIPP). If I then decide to sell £5000 worth of units and withdraw it - am I right in saying this comes out of my Capital Gains Tax allowance?

And would CGT also apply if I sold units of Fidelity Index Gilt Acc and withdrew them from the account?

Swipe

Only gains (if any) on the £5000 of units would come out of your allowance

Linton

If the funds are not held in a tax sheltered account CGT is potentially due in the year you sell.  Whether you withdraw the money from the account is irrelevent.

In your example it isn't the £5000 worth of units that you sell that counts against the CGT allowance but rather that part of the £5000 that represents the profit made on those units.

masonic

These are Acc funds, so not all of the gain will be a capital gain, some will be accumulated income. If you may have a CGT liability, then you would need to work out your actual capital gain by looking up the non-distributed income for each distribution period and deduct this from the gain (which can get very complex if you have also traded the fund during the time you held it), or if you have sufficiently detailed consolidated tax certificates from your platform, you could use these to deduct the income from the total return. For this reason I've always preferred Inc units rather than Acc in unwrapped accounts.

ColdIron

You have an 'allowance', the Annual Exempt Amount, of £12,300. If your gain (broadly the difference between what you sold it for less what it cost you) is less than that there is no CGT payable
https://www.gov.uk/capital-gains-tax/allowances

A_T

masonic said:

These are Acc funds, so not all of the gain will be a capital gain, some will be accumulated income.

so the income part (presumably the dividends that the fund automatically reinvests) would come under Income Tax Personal Allowance or the Dividend Allowance?

masonic

A_T said:

masonic said:

These are Acc funds, so not all of the gain will be a capital gain, some will be accumulated income.

so the income part (presumably the dividends that the fund automatically reinvests) would come under Income Tax Personal Allowance or the Dividend Allowance?

Yes, the Fidelity Index World fund would contribute to your dividends earned each tax year and may be covered by your dividend allowance, while the gilts fund will distribute interest, which would count towards your interest earned each tax year and may be covered by your personal savings allowance. If you have free personal allowance, then that could mop up anything that exceeds the other two.