Hello all,
I received the ERI report for LDUK for 2025 recently…. 0.5049 per unit! For a distributing fund this is really high (it should be virtually zero). Previous years have all been low but for some reason LDUK and its European brother LDEG both had massive ERIs. For GIA investors this is a big problem - on a £100k investment LDUK would make ~£4700 from dividends but the investor would have to fork out £4000 ERI payment (less dividend allowance) to the greedy HMRC.
Anyone have any insight as to why ERI for this fund was so high in 2025? I trawled through the annual reports and cant see anything. An apology would be nice as id expect a lot of people hold distributing funds in GIAs and don’t expect the ERI supertax.
I know an ISA would protect against ERI but surely excess like this would only push away the other half of your clients using GIAs?
Link to fund literature: Here
That’s painful. I asked Gemini AI “Why is ERI on LDUK so high? for 2025 recently…. 0.5049 per unit!” It suggested several reasons which I won’t try to repeat here. Have you tried sending a query to L&G?
Yes i wrote to them last Thursday and of course no answer. Hahahaha i also asked Grok what the deal was with the high ERI and he (it) gave me some wishy washy answers but basically said choose another fund. And here i was choosing a distributing fund for my GIA to avoid a harsh ERI. Suffice to say unless i get a “this will never happen again” email from L&G ill be demoting this on my hitlist
It does seem weird as usually on distributing share classes, it’s a trivial amount and certainly not near the level of distributed income. Looking at the previous year, could it be possible they’ve made a mistake? I can’t think of a good reason why dividends received internally would have basically doubled over a year?
I agree, very unusual for a distributor and enough to discourage GIA investors I’m sure. I have wrote to them twice now with no reply to either. Shame as its one of the highest yielding dividend ETFs in the UK with good capital growth too but unless investing through a sheltered account you can kiss most of your annual income goodbye from this fund. My 2nd choice fund is IUKD which is similar in yield and has consistently had virtually zero ERI but its report end date and fund distribution dates occur in different tax years which not a major issue but a further ERI complexity I could do without. ERI is possibly the worst tax imaginable for GIA ETF investors!
Yep it’s all to do with the offshore reporting fund rules which came in around 2009, I think. It’s a big “gotcha” for some investors because I suspect it’s not widely known about, and it seems almost designed to trip people up.
With L&G if they are just not responding in a reasonable time frame, then it’s probably fair to escalate it. Try Contact us | LGIM Investment Management
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Thanks for your reply. Yes ERI is a complete swine and i wouldnt put it past the HMRC to be using this overcomplicated and annoying thing just as a Gotcha like you say. One tiny little mistake and im sure they’ll be adding penalty interest on faster than you can say vote labour! I’ll hold off from emailing L&G using your link until Thursday by that time it’ll have been two weeks since i wrote to them - an unreasonable amount of time in the investing world. Other funds i’ve contacted with ERI queries have come back to me in like 1-3 days
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Hurrah a win!
I’ve finally received an email back from L&G and they have confirmed there is an error in their 2025 ERI calculations for this fund.
They have confirmed the 2025 ERI should be zero and they are now working hard to revise and replace the ERI report on their website.
Hopefully this will help someone….. it certainly helped me
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