ERNS ETF GBP - what tax

Newbie_John

I understand that quaterly "dividends" are taxed as interests, but what about income before? If I buy just after dividends pay out, keep for a month would that be CGT only?

aroominyork

It's better to talk about 'distributions' as a term that covers dividends and interest. The answer to your question is Yes - if you buy and sell between ex-dividend dates, you only pay CGT.

wmb194

https://forums.moneysavingexpert.com/discussion/6683210/erns-etf-gbp-what-tax

*Interest (the plural of interest is interest). Generally speaking yes, it would be CGT but you need to be careful of owning ETFs when they trigger an excess reportable income liability. For ERNS is looks like that's 31/05(?) but last year and all the other years I've checked it was zero so it might not be a concern with this particular fund.

masonic

If you just want a one-off place for this money then you could do this, but it is not really workable over multiple quarters due to Bed & Breakfast rules.

PloughmansLunch

Apologies for the semi-hiijack but on a similar money market note, presumably excess reportable income also applies for CSH2? It's the only accumulating ETF I have outside of any tax shelters

aroominyork

https://forums.moneysavingexpert.com/discussion/comment/82136149#Comment_82136149

There is a long thread about CSH2. The bottom line is that ERI will be reported on 30 September (and distributed six months later) and, from the information I received, the ERI is taxed as dividend rather than as income.

https://forums.moneysavingexpert.com/discussion/6532073/csh2-taxation-and-performance

PloughmansLunch

Thanks - that's a great help

slinger2

https://forums.moneysavingexpert.com/discussion/comment/82136169#Comment_82136169

I'm still confused as to whether the reporting date in 30 Sep or 31 Oct. You'd think this would be easy to find out.

aroominyork

https://forums.moneysavingexpert.com/discussion/comment/82136209#Comment_82136209

Earlier this year the named management company switched from Lyxor to Amundi. They moved the date from 31/10 to 30/09.

Newbie_John

https://forums.moneysavingexpert.com/discussion/comment/82136114#Comment_82136114

So what implication this will have? Lets say I did for 4 months avoiding one distribution?

As an example, I buy £10k sell with £50 profit, repeat 3 times more and then stop - last time I sell £10200, so does it just mean that I dont report 4x£50 CG but £200 isntead?

masonic

https://forums.moneysavingexpert.com/discussion/comment/82136529#Comment_82136529

Actually, ignore what I said. There is an anti-avoidance rule whereby if Bed & Breakfast rules cause a disposal to be matched to a purchase within 30 days, then the disposal is ignored for the purposes of calculating income - but, this applies to ERI not actual distributed income.

You would therefore just have the issue of spread and any costs eating away at your £200 capital gain, and if there were any ERI, you'd likely have to pay income tax on that.