Unit Trust Closure?

Frank99 Forumite Posts: 594
Fifth Anniversary 100 Posts Name Dropper Photogenic
One of my Unit Trusts held outside of an ISA is closing down, I have an option to receive the £5600 in my Bank or do a fund switch and deposit it into my larger Unit Trust with the same company.
I am struggling to make a choice! I am concerned with a fund switch being a taxable event but i don't know if the fund it is going into would also pay tax or if i would pay more than receiving it in my account, Does anybody know what the best choice is likely to be. 
Enjoy everyday like it's your last!


  • EthicsGradient
    EthicsGradient Forumite Posts: 704
    500 Posts Fourth Anniversary Name Dropper
    You say you are "concerned with a fund switch being a taxable event". The company ought to advise you on whether it is or not. Receiving the cash would definitely be subject to capital gains; this year, you have £6,000 allowance in gains before you pay CGT.
    " i don't know if the fund it is going into would also pay tax" - in what sense?
    "if i would pay more than receiving it in my account" - I can't see a situation where you would. Again, it's the responsibility of the unit trust company to make this clear. Ask them to be explicit about the tax situation.
  • redux
    redux Forumite Posts: 22,974
    Part of the Furniture 10,000 Posts Name Dropper
    The difference between the sale cost and original acquisition cost is a capital gain.

    There is an annual allowance for capital gains tax, now £6000, decreasing next year to £3000, so if you have no other gains this will not be taxable. If you do have other gains, or are considering other sales, bear this in mind.
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