Income that arose within the share portfolio of a discretionary trust prior to the accumulation period ending was invested pending distribution. It is recorded as 'Undistributed income' in the accounts, whereas in the investment report it is shown as a Capital investment.
Is this mismatch perfectly normal? As long as the accounts say it's income, does it continue to be income despite having been temporarily capitalised by the investment managers?
Does any additional income arising from this investment also go into the 'Undistributed income' pot, thus boosting the amount available for distribution when that occurs?
Thanks.
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