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Posted Thu, 30 Nov 2023 12:56:10 GMT by Normany001
There are a number of companies now providing this type of ETF, these type of ETF do not seem to fall into the normal 3 categories of ETF. They pay dividends every month, dependant on how much they gain from selling covered calls, is this classed as CG or Income for tax purposes?
Posted Fri, 01 Dec 2023 10:28:47 GMT by HMRC Admin 20
Hi Normany001,
Please have a look at the taxes manual at:-
 Stamp Taxes on Shares Manual STSM101060 - Introduction to Collective Investment Schemes: Exchange Traded Fund - Overview
for advice on exchange traded funds.
Thank you.
Posted Sun, 28 Jan 2024 10:33:15 GMT by
Hi, I am interested in the answer to this question. The taxes manual does not cover this particular class of ETF. Covered Call ETF hold equities but write equity options on top of it to generate an income stream. They distribute this income in the form of a dividend like any ETF. So the investor receives a dividend but that dividend is generated from the proceeds of selling options. Gains form the sale of option are classed as CG. So is the dividend paid by the ETF classed as CG too ? An example is the Global X NASDAQ 100 Covered Call UCITS ETF Dis, a reporting fund. According to a representative at Global X (see) However, according to Oliver, the premiums received on the options are not seen as “traditional income” from a UK perspective, meaning the distributing share class is unlikely to be subject to the higher rate of income tax. “Obviously, it depends on the jurisdiction, but options premium is not typically seen as income,” Oliver said. Can HMRC clarify its position on the above please ? Thank you.

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Posted Wed, 31 Jan 2024 10:28:51 GMT by HMRC Admin 21
Hi hugo,
An Exchange Traded Fund (ETF) is a form of Collective Investment Scheme and contains a pool of investments (‘the scheme property’) derived from the contributions of investors. The pool of investments is divided into equal portions called shares, and investors hold a number of shares depending on how much they have contributed. 
The investors in the ETF are beneficially entitled to an undivided share of the investments subject to the ETF and are referred to as shareholders. The price of shares is determined by the Authorised Corporate Director of the ETF (usually on a daily basis) at the current market value of the investments held in the fund.  
An ETF is a collective investment scheme which is: 
ETF's can be listed on the stock exchange.  
Open ended Investment companies (OEIC's) cannot   
For more information go to  Stamp Taxes on Shares Manual
Thank you.


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