Self-assessment - dividends and Capital distributions questions

Boleyn19

I have just received my consolidated tax certificate from a unit trust.

The Dividend columns are Dividend, equalisation and amount reinvested - do I put the dividend amount in the SA?

And the Capital distributions - where do I put this figure?

Thanks in advance

Bookworm225

please confirm - do you receive the dividend as cash money paid into your bank account (ie the unit trust is an "income fund") or is any dividend entitlement used to purchase additional units in the fund so you do not receive physical cash but the number of units you own increases over time (ie an "accumulation fund")? 

"reinvested" implies this is an accumulation fund and that figure should be the total of dividend + equalisation?

Boleyn19

Bookworm225 said:

please confirm - do you receive the dividend as cash money paid into your bank account (ie the unit trust is an "income fund") or is any dividend entitlement used to purchase additional units in the fund so you do not receive physical cash but the number of units you own increases over time (ie an "accumulation fund")? 

"reinvested" implies this is an accumulation fund and that figure should be the total of dividend + equalisation?

The dividends are reinvested.

probate_slave

Not sure why @Bookworm225 would think this.

Equalisation payments are not taxable income but a return of capital. The OP is taxable on the dividend alone. It makes no difference that it is an accumulation fund.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg57705

The capital distribution is also, by definition, not treated as income. And if the value is small compared to the value of the shareholding, it does not need to be reported as a disposal for CGT.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg57835

poseidon1

probate_slave said:

Not sure why @Bookworm225 would think this.

Equalisation payments are not taxable income but a return of capital. The OP is taxable on the dividend alone. It makes no difference that it is an accumulation fund.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg57705

The capital distribution is also, by definition, not treated as income. And if the value is small compared to the value of the shareholding, it does not need to be reported as a disposal for CGT.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg57835

Just to complete your analysis, equalisation receipts are deducted from the original acquisition cost of the unit trust for future CGT purposes. This can be a bit of pain with regard to unwrapped monthly unit trust investing whether it be income or accumulation units.