Taxation on Short Term Money Market fund

andyandyman

I have a question about taxation on Short Term Money Market funds. Specifically:
Royal London Short Term Money Market Y Acc    ISIN: GB00B8XYYQ86

I plan to hold this fund in a normal investment account (I have used my ISA allowance). Am I correct that:

1. When I sell, the difference between buy and sell price will be subject to CGT?

and:

2. The income is taxed as interest even though it is an accumulation fund?

In the latter case is the "interest" automatically reported to HMRC by the investment account provider or do I need to report it myself? Does it fall within the same £1000 personal savings allowance as normal savings income?

And is this fund a decent choice for STMM? I just want something that will pretty much track the base rate. 

masonic

1. No, only the part of the gain that isn't interest. You'll only be taxed on the part above the annual exempt amount.

2. Yes, and you'll need to declare it yourself, but only if it falls outside your PSA.

dunstonh

Why are you choosing the Acc version and not the Inc version?   Depending on the quality of your platform's reporting or your ability to work it out manually, the INC version would be so much easier.

Sam_666

Yup, as dunstonh said, why are you using Acc version?
Also, you can get better rates in savings accounts and more security.

andyandyman

dunstonh said:

Why are you choosing the Acc version and not the Inc version?   Depending on the quality of your platform's reporting or your ability to work it out manually, the INC version would be so much easier.

Sam_666 said:

Yup, as dunstonh said, why are you using Acc version?
Also, you can get better rates in savings accounts and more security.

Thanks. 

It's a good question. I was planning to use acc rather than inc because I want to grow the pot and the reason I'm looking at STMM rather than savings accounts is because I've grown tired of shifting large sums every few months in order to chase the very top interest rates. Banks are making it harder and harder to move money due to the money laundering checks. Last time I moved it I had to spend 15 minutes on the phone to get the money out and another 25 minutes to get the receiving bank to accept it.  

The platform will be iWeb. Does anyone know what their reporting is like?

I should add that this money will all end up in ISAs eventually. At current ISA limits that will take three years but if the budget reduces the ISA allowance then it will take longer (and be quite annoying!)

ColdIron

andyandyman said:

The platform will be iWeb. Does anyone know what their reporting is like?

It's fine, pretty much like everyone else's. It's a standard format, equalisation, dividends etc

No help for capital gains beyond the usual statements (and your contracts notes) but that's almost universal

dunstonh

No help for capital gains beyond the usual statements (and your contracts notes) but that's almost universal

Intermediary platforms have CGT calculators.  It makes things so much easier.  However, the adviser takes the liability for the calculation even thought its platform software.   I guess platforms on the DIY side are wary that they cannot shift liability and therefore don't offer it to DIY investors.

masonic

dunstonh said:

No help for capital gains beyond the usual statements (and your contracts notes) but that's almost universal

Intermediary platforms have CGT calculators.  It makes things so much easier.  However, the adviser takes the liability for the calculation even thought its platform software.   I guess platforms on the DIY side are wary that they cannot shift liability and therefore don't offer it to DIY investors.

Such calculations are only reliable if all of your holdings are in one place. The risk is provider calculations only take account of part of a s.104 holding. The adviser would hopefully know of any other investments tucked away off-platform.