Self assessment: Vanguard LifeStrategy20%: in interest or dividends section? 12 January at 9:31PM edited 12 January at 10:31PM in Savings & investments 2 replies 184 views

Waldir

Hi all,

I have some money in Vanguard LifeStrategy20% and I'm not sure if it needs to be declared on my self assessment tax return under interest or under dividends...
Would anyone know?

I'm wondering because this page: https://techzone.abrdn.com/public/investment/Guide-Taxation-of-Collectives 
mentions "Where the market value of the fund is made up of more than 60% of cash or fixed interest securities such as gilts or corporate bonds, the fund will be classed as a non-equity fund and income is treated as interest."


I have a Consolidated Tax Certificate from Vanguard, which also doesn't help much as it mentions both the "interest" and "dividend" words:
Under the "UK Interest Distribution Schedule" section, my interests/dividends are listed under columns named:
- UK income tax Interest distribution £
- £ Equalisation
- £ Dividend received (= the total of the 2 previous ones)

Thanks for any help

ColdIron

The abrdn site is correct, VLS20 distributions are treated as interest for tax purposes

Without being familiar with Vanguard's Consolidated Tax Certificate the "UK Interest Distribution Schedule" section sounds like the right place

UK income tax - is what I would use in my SA

Equalisation - this is a return of capital for recent purchases and is not taxable

Dividend received - this could just be sloppy wording or maybe the heading is used for both the dividend and interest sections. Distributions are usually composed of both interest (or dividends) and equalisation (if applicable)

Waldir

Thanks ColdIron, very helpful!

PS: I just corrected a mistake I made when copying the column names from Vanguard's tax certificate:
The first one is "Interest distribution £", and not "UK income tax", but I think your reply still applies