Hello. I’ve read that I need to report annual notional distributions for accumulating funds for tax purposes. However, I would then need to manually account for these when I do sell and (hopefully) realise a gain so I’m not double taxed via CGT. Can someone suggest a good workflow for this? I believe Trading212 won’t rebase my cost to include the notional distributions.
Also whilst distributing funds are more explicit in that you manually reinvest the dividends received, I believe there is still some ERI - excess reporting income - that needs to be treated as above. Is that correct?
Richard.W wrote a post about UK taxes, it might be worth having a read through the thread and if something is not already discussed then ask there:
There is a question on the “Dividend Tax” section regarding “What about ETFs?” that discusses this and it mentions that even distributing ETFs have “Excess Reportable Income” (ERI).
Regarding how those dividends then affect the price of the assets for the purpose of capital gains tax, it might be worth asking HMRC directly.
Nonetheless, I did a quick search online and I found this article from JustETF which indicates that ERI can be deducted from Capital Gains, but I think it would be worth confirming with HMRC anyway:
