CSH2: taxation and performance

aroominyork

I bought 106 units in June 2024 for a total cost of £119,603 (no equalisation is shown on the contract notes). I sold them in April/June 2025 for a total cost of £126,110, a gain of £6,507.

ERI of €60.7270/£51.65 x 106 = £5,475. That would mean that nearly all the gain is taxed as ERI and only £1,032 as CGT. Is that correct? 

Also, Monevator says:

• Bond fund distributions are returned on the SA106 as interest in the section ‘Interest and other income from overseas savings’. 
• Equity fund distributions are returned on the SA106 as dividends in the section ‘Dividends from foreign companies’. 

Given that CSH2 holds equities which it swaps for quasi-SONIA income, is the ERI reportable as a bond or equity fund distribution?

masonic

aroominyork said:

I bought 106 units in June 2024 for a total cost of £119,603 (no equalisation is shown on the contract notes). I sold them in April/June 2025 for a total cost of £126,110, a gain of £6,507.

ERI of €60.7270/£51.65 x 106 = £5,475. That would mean that nearly all the gain is taxed as ERI and only £1,032 as CGT. Is that correct? 

Also, Monevator says:

• Bond fund distributions are returned on the SA106 as interest in the section ‘Interest and other income from overseas savings’. 
• Equity fund distributions are returned on the SA106 as dividends in the section ‘Dividends from foreign companies’. 

Given that CSH2 holds equities which it swaps for quasi-SONIA income, is the ERI reportable as a bond or equity fund distribution?

Does the report not tell you what type of income it is? I don't think I would want to face the prospect of declaring the income as dividends and paying less tax without clear evidence this is true. Whereas declaring as interest incorrectly would not result in an underpayment of tax (and I guess would be more likely for this kind of swap).

Thank goodness I have not invested in this ETF unwrapped, so don't have any of these issues.

aroominyork

I cannot find any guidance in Amundi's various reports about whether ERI is declared as income or dividend. Can anyone help with this? And do you agree it looks like only c.15% of the year's gain is subject to CGT, and the rest of taxed as ERI? 

Also, how exactly do I offset the ERI on self-assessment for CGT purposes? Do I increase the purchase price by the ERI per unit; or reduce the sale price by ERI per unit; or something else? 

LateGenXer

aroominyork said:

I cannot find any guidance on Amundi's various reports about whether ERI is declared as income or dividend. Can anyone help with this?

Per https://www.gov.uk/hmrc-internal-manuals/investment-funds/ifm13320#bond-funds asking the fund manager is the best chance.  See https://www.amundietf.co.uk/en/individual -> Contact Us.

And do you agree it looks like only c.15% of the year's gain is subject to CGT, and the rest of taxed as CGT? 

I don't understand the question.Everybody who held shares on 31/OCT/2024 will be assumed to receive the €60.7270 per share on 30/APR/2025.How much one will pay in CGT will depend on the purchase/sale dates.  The capital gains can be larger or much smaller than the ERI.  People who just bought and sold around 31/OCT/2024 will have a capital loss near the ERI.  People who happened to sold before 31/OCT/2024 or bough after it might end up with just capital gain, and no ERI.

Also, how exactly do I offset the ERI on self-assessment for CGT purposes? Do I increase the purchase price by the ERI per unit; or reduce the sale price by ERI per unit; or something else? 

Increase purchase price.  But regarding CGT I recommend you read up on

• https://github.com/LateGenXer/finance/blob/main/cgtcalc.md#vanguard-uk-reporting-fund-faq-guide-example
• https://adviserservices.fidelity.co.uk/media/fnw/guides/taxing-calculations-capital-gains-tax.pdf

and consider using my calculator, specially if you bough/sold in multiple transactions, or at least to double check your calculations.

GeoffTF

aroominyork said:

Also, how exactly do I offset the ERI on self-assessment for CGT purposes? Do I increase the purchase price by the ERI per unit; or reduce the sale price by ERI per unit; or something else? 

ERI is added to the Section 104 pool cost whenever it arises. You fill in the box for your capital gains, and attach a pdf showing your calculations.

masonic

aroominyork said:

And do you agree it looks like only c.15% of the year's gain is subject to CGT, and the rest of taxed as ERI? 

Also, how exactly do I offset the ERI on self-assessment for CGT purposes? Do I increase the purchase price by the ERI per unit; or reduce the sale price by ERI per unit; or something else? 

ERI is an allowable cost. You have calculated what it amounts to for your holding. Allowable costs can be deducted from your gross gain. Exactly how you do it depends on how you set out your computations. HMRC provides a worksheet in the SA108 Notes at the end of the document. Personally, I would use my own spreadsheet with itemised costs. ERI isn't associated with the acquisition or disposal of the asset, and if you'd held for several years, you'd have more than one entry to include.

aroominyork

LateGenXer said:

And do you agree it looks like only c.15% of the year's gain is subject to CGT, and the rest of taxed as CGT? 

I don't understand the question.

Everybody who held shares on 31/OCT/2024 will be assumed to receive the €60.7270 per share on 30/APR/2025.

How much one will pay in CGT will depend on the purchase/sale dates.  The capital gains can be larger or much smaller than the ERI.  People who just bought and sold around 31/OCT/2024 will have a capital loss near the ERI.  People who happened to sold before 31/OCT/2024 or bough after it might end up with just capital gain, and no ERI.

It was based on the transactions I showed above of "I bought 106 units in June 2024 for a total cost of £119,603 (no equalisation is shown on the contract notes). I sold them in April/June 2025 for a total cost of £126,110, a gain of £6,507.ERI of €60.7270/£51.65 x 106 = £5,475. That would mean that nearly all the gain is taxed as ERI and only £1,032 as CGT.". ie about 85% of the gain taxed as income and 15% as CGT - yes?

Thanks LGX, Geoff and masonic for guidance on completing self-assessment. Bottom line - get it right and submit clear calcs but there seems to be more than one way to skin the cat. 

LateGenXer

about 85% of the gain taxed as income and 15% as CGT - yes?

The percentages are not very meaningful, but yes, they look about right.

Personally I'd use the exchange rate for 30/05/2025 from https://www.trade-tariff.service.gov.uk/exchange_rates/view/2025-4?type=monthly though, as my understanding is that that is when the distribution is considered made.

FWIW, if one translates what you described into the cgtcalc format it would be something like:
BUY 01/06/2024 CSH2 106 1128.3301886792453 0 DIVIDEND 31/10/2024 CSH2 106 5475 SELL 01/06/2025 CSH2 106 1189.7169811320755 0
which would produce

SUMMARY Tax Year Disposals Proceeds Costs Gains Losses Allowance Taxable Gain Carried Losses ────────────────────────────────────────────────────────────────────────────────────────────── 2025/2026 1 126110 125078 1032 0 3000 0 0 TAX YEAR 2025/2026 1. SOLD 106 CSH2 on 2025-06-01 for £126110 giving GAIN of £1032 Disposal proceeds 126110 Cost of 106 shares in S.104 holding for £125078 -125078 ────────────────────────────────────────────────────────── Gain 1032 SECTION 104 HOLDINGS CSH2 Date Description Identified ΔCost Pool Shares Pool Cost ───────────────────────────────────────────────────────────────────────────────────────── 2024-06-01 Bought 106 shares for £119603 106 119603 106 119603 2024-10-31 Notional distribution 5475 106 125078 2025-06-01 Sold 106 shares 106 -125078 0 0 ABOUT Generated by cgtcalc.py version 98eafcd (2025-08-31).
However it sounds you made more than one disposal at different prices.

wmb194

LateGenXer said:

about 85% of the gain taxed as income and 15% as CGT - yes?

The percentages are not very meaningful, but yes, they look about right.

Personally I'd use the exchange rate for 30/05/2025 from https://www.trade-tariff.service.gov.uk/exchange_rates/view/2025-4?type=monthly though, as my understanding is that that is when the distribution is considered made.

FWIW, if one translates what you described into the cgtcalc format it would be something like:

BUY	01/06/2024	CSH2	106	1128.3301886792453	0
DIVIDEND	31/10/2024	CSH2	106	5475
SELL 01/06/2025	CSH2	106	1189.7169811320755	0

which would produce

SUMMARY

Tax Year   Disposals  Proceeds   Costs  Gains  Losses  Allowance  Taxable Gain  Carried Losses
──────────────────────────────────────────────────────────────────────────────────────────────
2025/2026          1    126110  125078   1032       0       3000             0               0


TAX YEAR 2025/2026

1. SOLD 106 CSH2 on 2025-06-01 for £126110 giving GAIN of £1032

  Disposal proceeds                                 126110
  Cost of 106 shares in S.104 holding for £125078  -125078
  ──────────────────────────────────────────────────────────
  Gain                                                1032


SECTION 104 HOLDINGS

CSH2

     Date     Description                       Identified    ΔCost  Pool Shares  Pool Cost
  ─────────────────────────────────────────────────────────────────────────────────────────
  2024-06-01  Bought 106 shares for £119603            106   119603          106     119603
  2024-10-31  Notional distribution                            5475          106     125078
  2025-06-01  Sold 106 shares                          106  -125078            0          0


ABOUT

Generated by cgtcalc.py version 98eafcd (2025-08-31).

However it sounds you made more than one disposal at different prices.

30/04/25..

LateGenXer

wmb194 said:

30/04/25..

For CGT calculations, it's the reporting period end date (31/OCT/2024) that matters, regardless of the distribution date.  That's when Section 104 needs to be adjusted, so sales than happen between that date and the distribution date have their cost properly calculated.

Otherwise, one can get nonsense results.  Imagine somebody buys some 1 CSH2 on 30/OCT/2024, sells it on 1/NOV/2024.  It needs to consider the ERI.  But by the distribution date of 30/APR/2025 the S.104 hold should be at zero, given there are not shares held.  It's too late to adjust it then, or it would go negative.

(Ditto for notional income of accumulation shares of UK funds: S.104 should be adjusted on the ex-dividend date, not the dividend distribution date.)