ETF in a GIA

EdSwippet

ColdIron said:

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

Also, a downside of 0.5% stamp duty on all Investment Trust purchases. Not payable on ETFs or OEICs.

ColdIron

True enough though not if domiciled outside the UK, Jersey, Guernsey etc. You don't have to work it out annually for tax purposes though, just a one time addition to your cost to reduce CGT, simple as it gets

GeoffTF

If you are investing in a GIA, you need to learn a lot. The main hazard is not knowing what you do not know. You not only need the ability to work out your tax year by year, but you also need to understand the future tax implications (assuming the rules remain the same). The alternative is to hire professional help. There are financial advisers, accountants and tax advisers out there, but they are not cheap.

dales1

Albermarle said:

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.

But it will be frequent that people do receive inheritances, or pension lump sums, that put them in this tax predicament of ETFs in GIAs. 

We should help them to manage their way through this. The knowledge needed shouldn't be beyond the ability of the common person to absorb, or this forum to provide.

GeoffTF

dales1 said:

Albermarle said:

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.

But it will be frequent that people do receive inheritances, or pension lump sums, that put them in this tax predicament of ETFs in GIAs. 

We should help them to manage their way through this. The knowledge needed shouldn't be beyond the ability of the common person to absorb, or this forum to provide.

Unfortunately, that is beyond what the average person is likely to achieve. We have the politicians to blame for that. We can answer specific questions and point people to various guides, which are never complete. A good educational level and numeracy is required, along with time and motivation. I wish it were different, but the answer for many people is to put their money in the bank, or seek professional help.

Albermarle

dales1 said:

Albermarle said:

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.

But it will be frequent that people do receive inheritances, or pension lump sums, that put them in this tax predicament of ETFs in GIAs. 

We should help them to manage their way through this. The knowledge needed shouldn't be beyond the ability of the common person to absorb, or this forum to provide.

I understand your point. I just think the OP was thinking that investing in ETF's in a GIA was an everyday thing for many people, and why was it not easier/more simple regarding the tax etc. So I was just giving some context.

Otherwise I think you are overestimating the ability of the 'common people' or in fact many highly educated people, when it comes to personal finance and investing.
If you stopped 20 people in the street and asked them what an ETF is, you would get a blank stare from at least 19. Many surveys have shown a surprisingly large % do not even understand percentages, averages, interest rates etc and many just stick their head in the sand if you mention investing, pensions etc

MoneyMan01

What would happen if someone didn’t know how dividends they’d earned? Or what would happen if you didn’t report. If the individual didn’t know what was owed, how would HMRC, and what would they do to take money/how could they specify the amount they would need to take? 

wmb194

MoneyMan01 said:

What would happen if someone didn’t know how dividends they’d earned? Or what would happen if you didn’t report. If the individual didn’t know what was owed, how would HMRC, and what would they do to take money/how could they specify the amount they would need to take? 

What are you contemplating now? Tax evasion?

GeoffTF

MoneyMan01 said:

What would happen if someone didn’t know how dividends they’d earned? Or what would happen if you didn’t report. If the individual didn’t know what was owed, how would HMRC, and what would they do to take money/how could they specify the amount they would need to take? 

HMRC receives data from the platforms. They use that data to investigate a random sample of taxpayers and any taxpayer who arouses their suspicions. They have the power to enforce payment of any unpaid tax with interest, and fine the taxpayer.

gravel_2

MoneyMan01 said:

What would happen if someone didn’t know how dividends they’d earned? Or what would happen if you didn’t report. If the individual didn’t know what was owed, how would HMRC, and what would they do to take money/how could they specify the amount they would need to take? 

Try it and let us know how it goes.