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Where Taxpayers and Advisers Meet

Tax due on Australian Managed Funds / Shares

deeno
Posts:13
Joined:Tue Mar 26, 2013 12:50 am
Tax due on Australian Managed Funds / Shares

Postby deeno » Thu Jan 17, 2019 10:38 pm

Hi,

My wife invested in some tax effective Australian managed funds and shares many years ago. As with many other funds the value has been dropping but we keep getting stung with tax due on foreign income and dividends (reinvested). We are not sure we are submitting correctly as not claiming double tax relief on all dividends plus we think we may be double paying tax (income & capital) when we have sold shares to utilise capital gains allowance on dividends received.

What is the max double tax relief we can claim? Is it it eligible for all Australian dividends received? How do we distinguish between capital gains on dividends reinvested versus initial investment? Can we claim any relief on the franking credits and tax on foreign income already paid by the funds? We have been calculating GBP gain by converting using HMRC average FX for the year for purchase and sale dates - is this correct? Again we have made gains due to fx movement although the market value of shares have fallen in AUD.

Thanks in advance.

DavidTreitel
Posts:271
Joined:Thu Aug 16, 2012 4:31 pm

Re: Tax due on Australian Managed Funds / Shares

Postby DavidTreitel » Fri Jan 18, 2019 11:36 am

Why do you think any gains are subject to UK capital gains tax? Are these UK reporting funds? If not, any gains are subject to UK income tax rather than capital gains tax.

deeno
Posts:13
Joined:Tue Mar 26, 2013 12:50 am

Re: Tax due on Australian Managed Funds / Shares

Postby deeno » Sat Jan 19, 2019 11:33 am

Hi DavidTrietal

Thanks for reply. They are not UK reporting funds. I have always thought when realising gains on foreign investments we would be liable to capital gains tax and was planning to sell shares to utilise capital gains allowance this tax year. Are you able to advise further on why it is subject to income and not capital gains tax?

DavidTreitel
Posts:271
Joined:Thu Aug 16, 2012 4:31 pm

Re: Tax due on Australian Managed Funds / Shares

Postby DavidTreitel » Mon Jan 21, 2019 9:33 am

If these are non-reporting funds, any gain is subject to UK income tax. There is no capital gains allowance. Losses cannot be set again offshore income gains. This is an anti-avoidance rule enacted way back in 1984.


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