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ETF Tax Implication
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Mabel leanne
Posted: 09 September 2010 10:59:52(UTC)
#1

Joined: 20/08/2009(UTC)
Posts: 3
Bought some Australian ETF in March 2010.The website shows the distributor status of this ETF as 'seeking'.My holding is showing a small loss at the moment.What is the tax implication when the fund is in the process of seeking a distributor or reporting status?
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Chairman2
Posted: 09 September 2010 16:06:56(UTC)
#2

Joined: 26/06/2009(UTC)
Posts: 11
would loe to know the answer too
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Rob Mackinlay (Citywire)
Posted: 10 September 2010 14:49:31(UTC)
#3

Joined: 03/09/2010(UTC)
Posts: 10
We got a couple of replies to this question.

Stacey Ash at iFunds said: "Unless the fund has reporting status all gains will be treated as income by HMRC."

Charles Mackinnon at Thurleigh Investment Management said: "Remembering that we are not accountants or tax experts, my understanding is that if a security is showing a loss, it counts as a capital loss irrespective as to reporting status or not. The fact that the fund is “seeking” reporting status is irrelevant."
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Mabel leanne
Posted: 11 September 2010 17:49:30(UTC)
#4

Joined: 20/08/2009(UTC)
Posts: 3
All seem clearer now.Fortunately my other ETFs have distributing status.Lyxor Canada ETF which is seeking reporting status is in an ISA,which is tax free.I have been watching a few ishares and Lyxor ETFs seeking the reporting status and it seems to be a slow process.Any additional ETF without the reporting status go straight in the ISA wrapper until the situation is resolved.I have just started a Stock and Shares self-select ISA and the number of ETFs I can put in it is limited.Hope the process of seeking reporting status improves or is it so complicated that it takes a long time to approve.One plus point is that once a fund receives the reporting status it does not have to reapply every fiscal year.
Thanks to the above contributors.
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