Fidelity ETF ishares FTSE 100

It is (relatively) straightforward. Mostly you just have to report what dividends you got... but as a special measure to stop people dodging income tax by using non-UK funds that don't distribute all their profits, the twist is that the fund has agreed to be a "reporting offshore fund" which will publish a report of how much income it received but didn't pass out to investor by way of dividend during the tax year. You'll need to include that extra number in your tax return.

It is a reporting offshore fund invested in equities so the income you get from it counts as dividends rather than interest.

You know how much you received in your fidelity account on the various distribution dates (and have a tax voucher for it). And iShares have published a report saying how much income (if any) they received on investors behalf but didn't actually distribute. For the Core FTSE100 UCITS ETF, the figure was £0.0001 per unit for their accounting year ended 28/2/2017. It would be deemed to be distributed to you (even though you didn't physically get it, it will have just been internally reinvested) six months later, ie 31/8/17. So that's what is going to be needed to be added into your report for tax year 2017/18. If you have 2000 shares at £0.0001 per unit that's £0.2

On the income part of your return there's box 4 for dividends received from UK companies (see notes), box 5 for other dividends received (see notes), box 6/7 for foreign dividends if the dividends are no more than £300.

If the divs (including the excess reported income amount) are over £300 you will need to put it into the "Foreign" pages of your tax return.

This is a separate PDF document from the basic SA100 if you're doing it on paper, or just mark on the online version that you need the Foreign pages when you are tailoring the return for your circumstances, and that section will appear. So then you can put in the dividend details from your tax voucher (plus the X shares you held multiplied by £0.0001 for excess undistributed income.

To save this rigmarole, if you only have limited ISA allowance it can be worthwhile doing your investing in foreign domiciled funds inside your ISA and your normal easy UK funds outside your ISA. Then the question of "excess reported income" amounts on offshore funds doesn't come up, because you don't have any non-UK funds outside a tax wrapper. Generally ETFs are going to be Ireland or Luxembourg domiciled.

confusedetf wrote: »

Is there a disadvantage to owning ishares FTSE 100 UCITS ETF taxwise compared with buying FTSE 100 shares which are not an ETF?

Well, for a start it means you have to fill out different boxes of the tax return from what you would do with normal UK dividends, and chase around for extra information about what was allocated to you without being distributed to your or your broker. Which is a "disadvantage" from a tax perspective as I would see it, because it's causing you to do more work. However, the tax rates themselves are the same.

In other words, in this case the particular ETF you are using is an HMRC compliant one (it has UK reporting fund status) so (unlike with some offshore funds) you don't need to pay income tax on your capital gains, you just pay normal capital gains tax on your casual gains, and you don't pay a higher rate of UK income tax on the dividends just because they're foreign, and Ireland won't have withheld any Irish tax on your distribution.

The tax situation might be different if you were using ETFs which were not compliant with that HMRC offshore funds reporting regime, or were based in a location where they withheld foreign taxes on dividends they distributed to investors.

As an aside, you mention now "ishares FTSE 100 UCITS ETF". There's an iShares accumulating ETF of that name which doesn't distribute income at all and the extra un-distributed income you would have needed to find out about and put into your tax return is much higher. The one you mentioned earlier was from the iShares Core range (IE0005042456) which pays out GBP dividends four times a year, right?

confusedetf wrote: »

To confirm, is 13776 units multiplied by £0.0001 £137.76?

No, it's about £1.38.

Sorry for any confusion, in my original post I meant 2000 shares at 0.0001 was £0.2 not £2. Have now fixed the typo

If you really have 13776 units/shares... they are worth about £7.50 each. Do you really have £100k worth of this fund? Or do you mean you have £13776 of the fund. No offence intended but if you were investing £100k into a single index via exchange traded funds I would have expected you to have looked into the implications a bit more. If it's a small dabble with some spare money that didn't fit into your ISA, fair enough

Does the dividend figure received also have to be entered in Box 6/7 for foreign dividends if over £300?

The instructions allow you to just put the numbers in those boxes if you have a small dividend value under £300. If you have a bigger number you can't put it in that box, you need to do the proper Foreign section

Plus get the Foreign Pages when tailoring the online tax return and enter dividend details and X shares held multiplied by £0.0001?
Thanks in advance

If the number is over £300 it's too big to be allowed to be put in the main part of your return, you put it on the Foreign pages instead, not as well as.

Just read the instructions.