The totally NOT complicated investment tax post

Hmmm not too keen on P2P. The below statement is enough to put me off.

Risk Warning Peer to peer investing involves lending money to people or businesses. This presents a risk that the borrower defaults on their loan commitment. When investing in P2P, your capital and interest are at risk and are not covered by the Financial Services Compensation Scheme (FSCS)

Hi this is incorrect. I’m a US tax accountant based in the UK. It’s not difficult to claim back the tax and you definitely don’t need to fly to the US to do so. A non US person would need to file a 1040NR tax return (plus an ITIN application if the don’t already have a US tax number). Plus attach all tax withholding documents (1042-s/1099).If resident in the UK - any tax withheld on capital gains for listed stocks is 100% refundable and any overpaid dividend tax is refundable (30% is standard if no W-8BEN was in place, else the treaty allows for a reduced withholding of 15%). All ITINs take 7 to 11 weeks and then 3 to 6 months for refund of tax.

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It would be more one platform that holds your S&S ISA cash with linked accounts to the couple of platforms you want to use to invest.

I actually think there is enough variety on the market for people to want this. Whether the fee would ever be worth it, I’m not so sure - Orca is expensive.

Alternatively, get majesty’s government should just let us invest in as many ISAs in a year as we want.

I’ve a few tax questions if anyone can help…

1.) I’ve read that the personal savings allowance – rather than the dividend one – applies to interest from unit trusts, ITs, OEICs and bonds. In effect, does that mean that I’d have £3,000 to play with, eg up to £2,000 relief on income from say an S&P 500-tracking ETF and £1,000 for an IT such as CTY?

2.) In the case of government and corporate bonds, do they need to be held individually rather than in an ETF for the personal savings allowance to apply?

3.) Not that Freetrade offers them yet but am I right in thinking that interest from Reits is taxed as income, eg 20% for a basic rate payer, so the dividend allowance does not apply? Is any other relief available for Reits held outside an Isa?

Freetrade does offer REITs, and yes, they’re taxed as income. I’m not aware of any other relief.

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Thanks. I stand corrected. I wrongly assumed that Freetrade didn’t offer any as I couldn’t see the well-known ones, such as BLND, INTU and LAND, in the stocks universe. Are you referring to the likes of IUKP, which track Reits?

They have FCPT at least.

Good evening, will FT be providing a consolidated tax certificate for GIA accounts at the end of each tax year? This was one of the questions on the Crowdcube pitch discussion this afternoon, I must admit I hadn’t thought about it before but my other online brokers do provide them to make it easier to complete your self assessment tax return

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Would be interesting to hear from Freetrade on this, especially since they’ve re-promoted this post today on social media. :slight_smile:

On a related note, it would be good to update the SIPP section of the post to take account of the different income tax rates and bands (and thus tax relief) that apply in Scotland:

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Great article, very clear explanation :clap:t2:

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With Bond ETF’s that pay interest, should this be declared as interest the same as bank interest or does it come under dividends ?

Bond coupons are considered interest, and are taxed as such. However, bond ETFs are not the same as bonds directly paying coupons to you.

This article from the Investors Chronicle is a few years old, but I believe it still applies.

The relevant part:

And if you hold a bond fund ETF you may have to pay income tax rather than dividend tax on your distributions.

“In some circumstances, the distributions can be taxed as interest payments rather than dividends,” adds Mr Springett. “This occurs when more than 60 per cent of the underlying investments of the ETF are comprised of interest-bearing assets. In these circumstances, the distributions will be taxed at the shareholder’s full marginal income tax rate (20 per cent, 40 per cent or 45 per cent) with no notional credit available.”

But if you hold these within a self-invested personal pension (Sipp) or individual savings account (Isa) it would negate any tax issues given the tax-free status of these wrappers.

Tax is an extremely individual thing, and don’t be fully guided by strangers on the internet - either spend the time to clarify things or ask your accountant please!

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Thanks Connor. Just have a few loose ends outside ISA’s currently. Going to get everything under ISA wrappers in the new TAX year and avoid the headaches.
Everything goes through an accountant at year end :+1:t3:

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Same.

The absence of headache when I’ll have everything in my ISA and SIPP will be heaven for me.

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I was researching more on this subject, so I found this summary, which I found useful for my question. Maybe it might help someone else.

Not quite the correct topic but similar enough for my question. Now we are in a new tax year, I need to start thinking about my self assessment forms and was wondering if anyone knows a decent app/site for doing this.

I am more than confident in the form filling and math side of things but just wondered if there is a decent 1 stop solution. It is a fairly simple one and is only to cover a 2nd job as a freelance analyst on top of a full time job that is PAYE so not too complicated.

No expenses other than 1 item I will have bought all year and adding all my EIS investments. If anyone has any suggestions I would be very grateful. :+1:

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Does FT provide an end of year summary account to help with tax affairs?

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Sort of. You can request a csv file that lists transactions (buy,sell,dividends,interest).

There is an “idea” post about Freetrade providing an Annual Tax certificate like a lot of other services do you can vote on:

Thank you. Who/ how is the request made?

If you’re :plus_: you can use in app chat, if not then email money@freetrade.io

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