Self-assessment tax return, do I include OEIC?

SnowWhiterThanWhite

I'm helping an elderly relative complete their self assessment tax return.  They have to do one as they have a flat which is rented out.
They've received quarterly interest from a 'Unit Trust/OEIC ISA' totalling just over £1000 for the year. Do I need to include this interest?
I've looked at various sources, but mixed answers
Can anyone advise?

Dazed_and_C0nfused

SnowWhiterThanWhite said:

I'm helping an elderly relative complete their self assessment tax return.  They have to do one as they have a flat which is rented out.
They've received quarterly interest from a 'Unit Trust/OEIC ISA' totalling just over £1000 for the year. Do I need to include this interest?
I've looked at various sources, but mixed answers
Can anyone advise?

Which source suggested interest from an ISA needed to be declared on a Self Assessment return?

Is the reference to £1,000 because you think it has some relevance?

Albermarle

An OEIC is a type of investment fund.
If it is held within a Stocks and Shares ISA, then any positive returns from  the fund are tax free.
Normally an QEIC would not produce interest but dividend income
If you leave that income within the ISA, or withdraw it, it does not matter . All returns/gains are tax free, so should not be reported in a SA.

wmb194

Albermarle said:

An OEIC is a type of investment fund.
If it is held within a Stocks and Shares ISA, then any positive returns from  the fund are tax free.
Normally an QEIC would not produce interest but dividend income
If you leave that income within the ISA, or withdraw it, it does not matter . All returns/gains are tax free, so should not be reported in a SA.

Depends on the OEIC. If it's primarily a bond fund its distributions will be classed as interest.

SnowWhiterThanWhite

Dazed_and_C0nfused said:

SnowWhiterThanWhite said:

I'm helping an elderly relative complete their self assessment tax return.  They have to do one as they have a flat which is rented out.
They've received quarterly interest from a 'Unit Trust/OEIC ISA' totalling just over £1000 for the year. Do I need to include this interest?
I've looked at various sources, but mixed answers
Can anyone advise?

Which source suggested interest from an ISA needed to be declared on a Self Assessment return?

Is the reference to £1,000 because you think it has some relevance?

I found this on a tax advice website under OEIC.  "The first £500 of dividend income is tax free as it's covered by the dividend allowance. Dividend income  is  taxed at 8.75%, 33.75% and 39.35% (basic, higher, additional rate taxpayers) , for amounts in excess of the £500 allowance.  "

wmb194

SnowWhiterThanWhite said:

Dazed_and_C0nfused said:

SnowWhiterThanWhite said:

I'm helping an elderly relative complete their self assessment tax return.  They have to do one as they have a flat which is rented out.
They've received quarterly interest from a 'Unit Trust/OEIC ISA' totalling just over £1000 for the year. Do I need to include this interest?
I've looked at various sources, but mixed answers
Can anyone advise?

Which source suggested interest from an ISA needed to be declared on a Self Assessment return?

Is the reference to £1,000 because you think it has some relevance?

I found this on a tax advice website under OEIC.  "The first £500 of dividend income is tax free as it's covered by the dividend allowance. Dividend income  is  taxed at 8.75%, 33.75% and 39.35% (basic, higher, additional rate taxpayers) , for amounts in excess of the £500 allowance.  "

That's only relevant if the fund is held in a taxable account. That wouldn't be relevant anyway as in your OP you state the income is interest. If earned in an Isa it's disregarded and you don't need to include it in a tax return.

SnowWhiterThanWhite

Albermarle said:

An OEIC is a type of investment fund.
If it is held within a Stocks and Shares ISA, then any positive returns from  the fund are tax free.
Normally an QEIC would not produce interest but dividend income
If you leave that income within the ISA, or withdraw it, it does not matter . All returns/gains are tax free, so should not be reported in a SA.

The self assessment online form says to include ALL interest, theres 2 sections, one for taxed interest and one for untaxed. Its a little confusing whether I need to include it or not, as I said, only having to complete a return due to renting out a property,  the combined rental income & state pension are around 15k but then the £1000 from OEIC ISA on top 

RacingDriver

Interest/dividends/capital gains made in an ISA are never include on a self-assessment tax return

Notepad_Phil

SnowWhiterThanWhite said:

Albermarle said:

An OEIC is a type of investment fund.
If it is held within a Stocks and Shares ISA, then any positive returns from  the fund are tax free.
Normally an QEIC would not produce interest but dividend income
If you leave that income within the ISA, or withdraw it, it does not matter . All returns/gains are tax free, so should not be reported in a SA.

The self assessment online form says to include ALL interest, theres 2 sections, one for taxed interest and one for untaxed. Its a little confusing whether I need to include it or not, as I said, only having to complete a return due to renting out a property,  the combined rental income & state pension are around 15k but then the £1000 from OEIC ISA on top 

Can't remember the exact words used and where (it might be in the guidance notes), but self assessment only wants to know about the interest that potentially could cause you to have to pay tax on it - but anything held within an ISA is 100% tax-free both of income tax and capital gains tax, so you do not add it to your self-assessment.

poseidon1

Hopefully, the link below ends this debate - 

https://www.gov.uk/individual-savings-accounts/how-isas-work#:~:text=If you complete a tax,or capital gains on it.

Nothing generated  within an ISA is either taxable or reportable.

I struggle to understand  why the OP was unable discover this direct from HMRC  or  the myriad of  other sources that cover the tax position of ISAs.

DRS1

SnowWhiterThanWhite said:

Albermarle said:

An OEIC is a type of investment fund.
If it is held within a Stocks and Shares ISA, then any positive returns from  the fund are tax free.
Normally an QEIC would not produce interest but dividend income
If you leave that income within the ISA, or withdraw it, it does not matter . All returns/gains are tax free, so should not be reported in a SA.

The self assessment online form says to include ALL interest, theres 2 sections, one for taxed interest and one for untaxed. Its a little confusing whether I need to include it or not, as I said, only having to complete a return due to renting out a property,  the combined rental income & state pension are around 15k but then the £1000 from OEIC ISA on top 

Just to be clear taxed interest is where there has been a tax deduction when the interest is paid.  Not that common these days as banks and building societies pay interest gross but it can happen.  Untaxed interest is interest paid gross ie without a tax deduction.  It does not mean interest received in an ISA (at least not yet).