Skip to main content

This is a new service – your feedback will help us to improve it.

  • Share disposal order

    Hi, I sold shares in a UK investment trust a small amount (~1.1%) of which according to "HS284 Shares & CGT (2021)" are identified against shares purchased under the "bed & breakfasting" rule as I purchased them less than 30 days following the day of disposal, while the rest are identified against shares in the Section 104 Holding cost. I think that for SA108 CGT purposes I should still treat it as 1 listed disposal. Is this correct or should I report it as 2 separate disposals? Thank you. Regards, 
  • RE: Equalisation clarification

    Hello, thank you for the explanation and related links to my queries relating to UK AUTs/OEICs. I understand now that fund distributions (dividend/interest) to declare as investment income in the first allocation period are Dividend Group II distributions (equal to th efull dividend due to Dividend Group I minus equalisation) and full period dividend Group I for the following distribution periods. Once sold in calculating the capital gain/loss the allowable cost is reduced by the equalisation amount. In HS284 Shares and Capital Gains Tax (2021) that you suggested for further information, there is a section on "Accumulation units" which states that "If you hold accumulation units you will not receive distributions of income from the trust. Instead, the income is retained and reinvested automatically for you (a ‘notional distribution’). You do not receive any new units, but the value of your existing units is increased. If you receive notional distributions which are subject to Income Tax, you’re allowed the amount of these distributions as additional expenditure on your accumulation units" this seems to indicate that the allowable cost instead of being reduce by the equalisation amount is increased. Could you kindly clarify this point for me? Thank you. Regards
  • RE: Equalisation clarification

    Hello, Having thought further about equalisation vis-a-vis UK authorised unit trust/OEIC shares in terms of dividend/interest distributions and capital gains/losses to declare in the SA tax return, irrespective of whether the shares are Accumulation or Income/Distribution class, as equalisation is a return of capital I should deduct it from the first distribution allocation following purchase to declare and also deduct it from the Section 104 Holding allowable cost used in calculating CGL on disposal. In a nutshell I think that it reduces the taxable dividend/interest amount in the first distribution period and increases by the same amount the taxable capital gain / reduces the declarable capital loss as appropriate. So for example: if I invest £1000 in an Equity type UK Auth. UT/OEIC with quarterly dividend distributions (Accumulation or Income Distribution either class), - at the end of the first quarter it pays (Acc or Inc) £5 dividend and declares £1.5 equalisation, - at the end of the second quarter it pays £4.25 dividend, - after which I sell my investment for £1010. In such a case in my tax return in this hypothetical explanatory case - at SA 100 TR3 Box 5 I would declare £7.75 dividend received (£5 -£1.5+£4.25) and - on SA108 I would declare a capital gain of £11.5 [£1010-(£1000-£1.5)]. Please let me know if this is the correct approach to apply equalisation amounts with regards to declarable distributions and capital gains / losses or if I should alter my approach with reference to my UK authorised unit trust/OEICs Accumulation shares and Income distribution shares as explained in my initial post. Thank you. Best regards Edward
  • Equalisation clarification

    Hi, With an online UK retail investment platform I own distributing shares in a UK authorised unit trust/OEIC equity type, in the 2020/21 CTC the broker provided me with both dividends paid and equalisation figures. Reading the platform’s CTC and HMRC’s tax return notes (SA100 TRG6) I understand that I should declare the dividend paid as is (i.e. as received) in SA100 TR3 Box 5 “Other Dividend” not including (i.e. not subtracting from the dividend paid) the equalisation amount - is my understanding correct? As the equalisation amount is a return of capital, not income, I should eventually subtract the equalisation amount from the Section 104 Holding allowable cost (I invested in tranches) used in determining the eventual capital gain/loss when I will sell said investment. Again, is my understanding correct? If not, kindly tell me how to proceed. With another similar online provider I owned accumulation shares instead, in four different UK authorised unit trusts/OEICs, two are bond type so distributing interest and two equity type so distributing dividends. In the CTC they produced for 2020/21 the dividend and interest amounts to declare (in SA100 TR3 UK Income in Box 5 “Other dividends” and in Box 2 “Untaxed UK interest”) are respectively equal to dividend/interest received minus the respective equalisation amount in the first income allocation period after purchase. Is this correct? If so, as I sold these investments in 2020/21 in order to calculate the respective capital gains/losses would I need to alter allowable costs (again Section 104 Holding as I purchased in tranches) with the appropriate equalisation amounts? In calculating capital gains and losses incurred should I reduce or increase allowable costs by the respective equalisation amounts? As the shares are accumulation shares, given that equalisation amounts represent returns of capital, I think in this case increasing allowable costs with respective equalisation amounts makes logical sense. Kindly let me know whether my understanding is correct and how to best proceed. Thank you. Best regards Edward
  • ETF payment date

    Hello, In 2020/21 I held 4 distributing ETFs (2 Equity type and 2 Bond type, all 4 UK reporting foreign funds) on 7 April 2021 in my online UK retail account I received 4 distributions 2 of which qualify as overseas interest and 2 as overseas dividend. The record date for the distributions was 19 March 2021, effective date 31 March 2021 with payment typically made 10 business days after, as mentioned I received all 4 payments on April 7th 2021. The online platform provided me with a tax voucher where they included these 4 distributions in tax year 2020/21 but shouldn't I be declaring those payments in the 2021/22 SA tax return as I received the payments on 7-Apr-21? Thank you. Regards 
  • Fractional share sale

    Hello, Via an online retail brokerage platform I sold a fraction of a share of a foreign company listed on an HMRC recognised exchange. In terms of market the sale was confirmed as "OTC/not regulated foreign". In SA108 Capital Gain Summary I think I should still include this disposal as a listed shares disposal (i.e. Box 23 on CG2 SA108) because the company is listed. Is this correct, or should I include it in the unlisted disposal section (Box 31 on CG2 SA108) instead? Thank you. Regards Edward
  • Cashback

    Hello. On transferring ISA and personal pensions into a UK retail online broker's ISA and SIPP accounts I was credited with cashback amounts (£100 & £500 respectively) into a Loyalty Bonus account with the online broker. Similarly, I also received a small £25 cashback to make up for a IPO bonus cancellation.These cashback amounts cannot be withdrawn as cash nor be invested, they are used solely to pay off online broker's admin fees over time. No tax was withheld by the broker. I am resident and domiciled in the UK. Should I declare such cashback amounts in my SA tax return? If so, should they be input in SA100 page TR3 "Other UK income not included on supplementary pages" Box # 17 "Other taxable income" and Box # 21 "Description of income in box #17" ? Description being "online broker cashback promotion/offer". Thank you. Kind regards 
  • RE: REIT distributions

    Hi, thank you for your reply. With reference to my first question could you kindly clarify whether for UK REITs PIDs in SA100 box 21 (plus "Any other information" box 29) I just need to list the name of the various REITs I receive PIDs from or do I need to list all individual payments (including REIT name, date, amount)? With regards to my third question about dividends from Overseas REITs I wanted to double check with you whether they should be entered in SA106 F2 in the "Dividends from foreign companies" section and not "Interest and other income from overseas savings". I should have been clearer in my question, Is it correct to declare them as "Dividends from foreign companies" on SA106 F2? Thank you for your help. Best regards Edward
  • REIT distributions

    Hi, in my portfolio I hold shares in some UK and overseas REITs: I would like to clarify a few points regarding the periodic distributions I receive in my general share dealing UK retail online broker accounts please. UK REITs listed on LSE: With regards to UK REIT PID amounts received I understand that the aggregate amounts are reported on SA100 p TR3 box #17 “Other taxable income” and box #19 “Any tax taken off box 17”. In box #21 “Description of income…” plus “Any other information” (pTR7 box 29) am I supposed to list just the name of the various UK REITs from which I received PIDs or should I provide a detailed list indicating date, PID amount and REIT name for all the payments making up the aggregate amounts reported in boxes #17 and #19 on SA100 p TR3? With regards to the non-PID dividends paid by UK REITs from the notes (SA150 p TRG 6) I understand that they should be reported in aggregate in box #5 “Other dividends” on SA100 p TR3 because REITs are investment trusts. However, I have read on a couple of major UK REIT websites that non-PID dividends should be reported in box #4 “Dividends for UK companies” as usual for UK companies. With regards to the UK REITs I hold shares in, I have not come across any statements on this topic. Could you kindly clarify whether I am right in thinking I should include non-PID UK REIT dividends in box #5 for Other dividends or should it be in box # 4 as per UK companies? Overseas REITs: I own shares in some USA REITs, they are all listed and publicly traded either on NYSE or NASDAQ. They are all “equityREITS” not “mortgageREITs” as defined by Nareit they own and/or manage real assets such as infrastructure, data centres, offices, retail shopping malls etc. My understanding from Nareit and pwc is that US REITs are legally required to pay out at least 90% of their taxable income in dividends each year. I receive 85% of the gross US dividend payments. I also own some shares in a large Canadian REIT listed and publicly traded on TSE which own a range of mixed-use properties across the country and seem to currently payout 89% of operating cashflow. My understanding from pwc is that in Canada REITs do not have a minimum distribution requirement but in order to avoid a tax liability at the REIT level all of its taxable income (including taxable capital gains) must be paid or become payable each year. From Canadian shares I receive 75% of the gross dividend. I do not claim FTCR from my overseas shares. With regards to overseas REITs I have not found a concept similar to the UK PID, they declare and pay dividends which UK online retail broker consolidated tax certificates classify as “overseas dividend income”. I think I should include such overseas REITs dividends in the Foreign Pages SA106 p F2 in the “Dividends from foreign companies” section - am I correct? For each country code do I provide aggregate figures or does HMRC want me to list all overseas distributions individually? From a large USA equity REIT active in the wireless infrastructure sector I received a dividend defined on my online UK broker consolidated tax certificate as a “capital distribution”, on the REIT’s website they define it as a “non-taxable” distribution. The amount is very very small (i.e.£8.96), as it is approximately 0.33% of the REIT share value on the day of the distribution - well below 5%- and a small fraction of £3000 from “CG57835 -Small capital distributions: introduction” I think I should be able to just deduct this small distribution from my investment cost in the future when I sell my shares and calculate the relevant capital gain or loss to declare. Is this correct? Thank you. Regards Edward
  • Foreign Stock lending fees

    Hi, an online broker via its "interest-bearing portfolio service" at times lends out some of the US and European shares I hold in my portfolio, remunerating me on a pro-rata basis at an interest rate of typically 2%pa for the relevant period of time. The lending fee amounts I receive tend to be small. The broker is a Euro Zone bank subject to limited regulation by the UK's FCA and PRA. The online platform provides me this service as a UK resident retail client. Should I include said stock lending fee interest distributions on SA106 pF2 of the foreign pages under "interest and other income from overseas savings"? If not, kindly indicate where in the SA forms. Thank you. Regards.