RE: Forward Planning5 Sep 2021 17:49
Chicken said. . .
Options are:
1) Held on account (holds the money in your ISA wrapper so you can reinvest it in other good stuff or pay it out later etc )
2) Automatically reinvested (reinvest in the stock)
3) Paid out (paid into your bank account)
Is it not the case that whatever option you choose for your ISA account, the ISA incurs NO tax whatsoever.
However, the dividend in the Fund/Share account will always incur tax, both income tax and CGT.
Personal investment positions will determine whether a smaller holding will be best taking the dividend as income, whilst a larger holding may be better sold and incurring the lower rate CGT.
That's my understanding and what I am going to base my decision on. I suspect there will be a middle ground for some who will do a mix of taking the dividend and selling thereby paying some income tax and some CGT according to their own current tax situation.
Either way, HMRC are going to have a bonanza!
Lastly, I wonder how much the result may be affected by the handsome fees paid to the likes of UBS and others. Expect they can all retire after feasting on the carcass of EUA for so long. I don't think I will be grumbling though - might even raise a glass to them!
1N