Postby ben_power » Sat Apr 03, 2021 10:13 pm
Any capital growth when an investor sells or disposes of units/shares may be subject to Capital Gains Tax (CGT). This also includes fund switches. However, switches between different share classes within the same fund, for example switching between income and accumulation shares, are not treated as a disposal for CGT.
Tax is only payable where gains in the tax year exceed the annual CGT allowance (£12,300 in 2020/21). For individuals, the gain is added on top of their total income to determine the rate payable. Any part of the gain which falls within the basic rate tax band is taxed at 10% and the balance will be taxed at 20%.
I assume you hold your OEICs/Unit Trusts on a platform (Like Hargreaves Lansdown or Fidelity). If the total value of your fund/funds is less than £20,000 you should consider ISA wrapping then this issue will be removed.