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Where Taxpayers and Advisers Meet

Irish domcile/UK reporting funds - interest, dividends, excess reportable income

Emily111
Posts:2
Joined:Mon Jul 17, 2017 5:52 pm
Irish domcile/UK reporting funds - interest, dividends, excess reportable income

Postby Emily111 » Mon Jul 17, 2017 6:02 pm

I'm new to investing and have some funds in taxable accounts. Trying to work out my tax situation for the 2016-17 tax year. I'm almost sure I owe no tax, and I don't otherwise usually send a tax return. I'd rather not have to pay an accountant just to confirm the point.

It's not very clear to me how to interpret the broker tax voucher, and I have a few questions:

- Does an Irish-domiciled OEIC with UK reporting status count as an "offsure fund"? If so, if there were tax to be paid on it, would it go on the foreign pages of the tax return?

- I think for 2016-17, bond funds subject to basic rate tax deducted at source. But would this apply to an Irish domiciled bond fund with UK reporting status? My tax voucher contains no information on this, and I wouldn't be sure where to look for it. Perhaps there was simply no distribution, as I only held the fund a short time. Or perhaps they just omit all bond funds because they are all taxed at source, including those with Irish domicile.

- Would dividends from an Irish domiciled/UK reporting status fund be covered by the same £5000 allowance as dividends generally? And bonds by the £1000 savings /investment interest allowance?

- Excess reportable income. Does any broker include this information on their tax vouchers, or is it simply up to us to check for it? If there is some, presumably it also goes on the foreign pages?

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Irish domcile/UK reporting funds - interest, dividends, excess reportable income

Postby maths » Tue Jul 18, 2017 5:31 pm

- Does an Irish-domiciled OEIC with UK reporting status count as an "offsure fund"?
Yes.
Would dividends from an Irish domiciled/UK reporting status fund be covered by the same £5000 allowance as dividends generally? And bonds by the £1000 savings /investment interest allowance?
Yes.

Undistributed income of an offshore reporting fund is deemed to have been distributed (notional dividends and hence a UK income tax charge arises based on dividend rates.

Emily111
Posts:2
Joined:Mon Jul 17, 2017 5:52 pm

Re: Irish domcile/UK reporting funds - interest, dividends, excess reportable income

Postby Emily111 » Tue Jul 18, 2017 6:13 pm

Thanks so much for answering - that's very helpful.

FigNewton
Posts:46
Joined:Fri May 06, 2016 5:05 pm

Re: Irish domcile/UK reporting funds - interest, dividends, excess reportable income

Postby FigNewton » Fri Oct 06, 2017 12:26 pm

I am curious to know, but cannot find the answer readily on the web, the reason *why* excess reportable income exists. Why doesn’t a distributing ETF pay out all its income? What is, and why is, this extra income which is retained? Why is an unavoidable issue for a fund manager? Perhaps someone can explain.

It is of course a real nuisance to have to find, calculate, and then include this amount in tax returns, as well as keep a record to increase the cost basis for calculation of future capital gains tax. The data not provided in my year end tax statement from Interactive Investor, so I have to find it myself. The data for Vanguard ETFs is buried deep within their web site as

https://www.vanguardinvestor.co.uk/cont ... status.pdf

However, Vanguard only provide a link to data relevant to the 2016-17 UK tax year (excess income deemed paid 31/12/16). So you have to make a copy before it is replaced by the pdf for the following tax year. I know no way to find the information for previous tax years if one were wanting to look back.


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