ETF in a GIA

gravel_2

That's no excuse. These are complex financial products and shouldn't ideally be invested in without a proper understanding of what's involved...

Hoenir

MoneyMan01 said:

Most people will just get an ETF in a GIA, invest away without even realising that there is all of this extra info that we apparently need to be checking.

Investments held outside of  tax wrappers have been treated exactly the same way for decades. The house keeping isn't onerous if you do it at the time of each transaction. 

Apps unfortunately have made investing a casino game for many.  With people being unaware of the admin required. Not that the platforms care as not their problem. 

coyrls

Your platform should provide you with a tax summary each tax year for a GIA.

GeoffTF

MoneyMan01 said:

So in short, it doesn't matter which ETF (Div v Acc) is used. Going with one over the other isn't going to lower the tax bill?

Unfortunately it can. It is a real minefield. There is no substitute for knowing the rules and working out the numbers. It is safest to avoid accumulating finds in a GIA.

GeoffTF

coyrls said:

Your platform should provide you with a tax summary each tax year for a GIA.

It will not include Excess Reportable Income.

ChilliBob

Easier to use an OEIC, distributing. No hassles with etf withholding tax, domicilds, eri or any of that jazz.

EdSwippet

ChilliBob said:

Easier to use an OEIC, distributing. No hassles with etf withholding tax, domicilds, eri or any of that jazz.

Using an OEIC is not sufficient to remove the hassles. Any OEIC that is not UK domiciled has the exact same ERI and withholding tax issues as an ETF. And there are plenty of these, including popular Vanguard ones.

Example: VIS Plc Excess Reportable Income: 31 December 2023

To be sure to be clear of all this, you have to be certain to use only UK domiciled OEICs. A UK domiciled ETF would also remove ERI hassle, except that currently there are none.

Albermarle

MoneyMan01 said:

Good to know. I note the comment about the onus on us doing the leg work, but honestly, the information isn't actually made known. As in, generally most people won't know that there are all these things that have to be checked, reported on, such as ERI, notional distribution etc.

Most people will just get an ETF in a GIA, invest away without even realising that there is all of this extra info that we apparently need to be checking.

You have to remember that although investing via ETF's is growing, it still remains a niche area as far as the general public is concerned. The vast majority of the public would not even know what one was and probably some who do, do not really understand them. 
On top of that investing outside a S&S ISA or pension, is also very much a minority activity.
So to an extent by investing in ETF's in a GIA you are straying into 'experienced investor' territory, and the knowledge needed to back that up.

MoneyMan01

Fair points.

That is the stage I am at now, where this has now all come to light, I am now trying to educate myself on it and proceed from there. 

Is it just the ETF’s that require all the extra leg work? Or is it any investment within a GIA, or in fact any investment types beyond the taxable allowance?

ColdIron

Both ETFs and OEICs have issues

Investment Trusts are about as simple as it gets, no ERI, equalisation or retained dividends. Just simple capital gain and dividends (or interest). No index trackers however