The following information is relevant to UK resident taxpayers who have invested in a share class that has obtained UK Reporting Fund status. A list of share classes which currently have Reporting Fund status is published (and periodically refreshed) on the HMRC website.
If you are invested in a share class holding UK reporting fund status, you are required to include in your UK tax return your share of reportable income for the relevant period (broadly speaking the fund’s taxable income in excess of distributions made). Please note that the requirement to include this income in your return applies regardless of whether you are invested in an accumulating or distributing share class (albeit the amounts will differ).
As part of the regulations, the Fund is required to provide investors who hold shares in the Fund at the end of the relevant accounting period with an annual Report to Participants – these can be found using the links below. The Report to Participants includes details of the distributions actually made by the Fund during the accounting period as well as the excess income that is deemed to be distributed on the fund distribution date which falls six months after accounting period end. Please therefore take care in allocating the distributions or deemed distributions to the correct tax return period. For example, dividends paid on 2 August 2016 and 1 February 2017 both fall within the 2016/17 tax year, whereas the deemed fund distribution date of 30 June 2017 falls within the 2017/18 tax year. If you are in any doubt, please consult your tax advisor.
All share classes in the Fund currently operate full income equalisation. The effect of these arrangements is that income is distributed (or accumulated) to investors in proportion to the duration of their ownership of the shares in the relevant period and not impacted by the subscription or redemption of shares during the period. Where an investor has purchased shares during a period, a portion of the purchase price will have been in respect of Income Equalisation – the amount can be found on your subscription contract note (the value is calculated daily). Investors may be entitled to deduct the Income Equalisation from the distribution received following subscription or from the excess reportable income, as appropriate. Please therefore share details of your Income Equalisation with your tax advisor.
Finally, in relation to the Fund’s bond and credit sub-funds that have reporting fund status the distributions and excess reportable income relating to these sub-funds will be taxed as interest for individuals. Persons within the charge to UK corporation tax should account for the income / gains on their investments in the Fund’s bond and credit sub-funds under the loan relationship regime and should therefore ignore the reportable income figures provided.