If I hold OEIC accumulation fund (e.g.
Vanguard FTSE U.K. All Share Index Unit Trust acc) I must yearly report dividends for tax, by looking up the correct amount in the Distribution Table of Vanguard's Long Annual Report. For example, this was 700.9024p per share payable 31/12/17 for Group 1 shares (units purchased before 1 November 2016). Suppose I have 1000 Group 1 shares so the dividend is £7009.
The record date is 31/10/17. The ex-dividend date is 1/11/17. The payable date is 31/12/17. Depending on when I sell the shares I can be in one of two situations
- (a) owing dividend tax on £7009, but I may increase my basis cost by the same amount when calculating the gain for CGT, or
- (b) having no dividend tax liability, but a smaller cost basis on which to figure capital gains.
My Question is: what is the lastest date in the 2017-18 tax year that I could have sold my shares so as to be in situation (b) rather than (a). Is it 30/10/17, 31/10/17 or perhaps 30/12/17? I may prefer (b) since dividend tax is at 32.5%, but the capital gains may fall within my £11,300 tax-free allowance.
Though not a tax matter, I am also curious to know if anyone can explain why the price of these accumulation units does not fall at the ex-dividend date (as looking back at price history seems to indicate).
