Holding funds in general account

Ciprico

With pension and ISA contributions exhausted, and probably overweight in low coupon Gilts in GA, I'm looking to buy a fund to go in GA.

Am I right in thinking if I bought say £50k of HMWO the dividend (1.74%) should be around £875 so well under the £1k tax free threshold for dividends, and providing gain is less than 3k (6%) there is no CGT to pay. If growth is above 6% I won't begrudge paying a 10% CGT tax on the top bit - or spreading the sales over two years.

Are my assumption above correct ? Are there any dependencies on the £1k dividend threshold.

 I am still weighing up the pros and cons of the above against say TN25 with tax free gain of about 4.5%

I am 61 and on cusp of returing - so my horizons are so distant, and this unprotected cash would be the first to get spent once retired (after taking PA from pension)

Any thoughts....?

ColdIron

Ciprico said:

Am I right in thinking if I bought say £50k of HMWO the dividend (1.74%) should be around £875

The £875 is about right

so well under the £1k tax free threshold for dividends

It would be if it all fell in this tax year but it won't. The last ex dividend date was January and are quarterly so the next 4 dividends will fall in the 2024/25 year when the 'allowance' will fall to £500

As an offshore ETF you will need to declare Excess Reportable Income (ERI) and should also keep accurate records for tax purposes. A distributing OIEC might be simpler

Ciprico

Hmm, many thanks for that, both points I hadn't considered - I think I'll stick with Gilts....