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UK Reporting Funds

If you invest in funds classed as UK Reporting Funds then you must declare certain income from these on your tax return each year.

If you are unsure if this affects you or are unsure what you need to do please check with an independent tax advisor.

A UK Reporting Fund is a Fund which is based offshore but provides investors with a tax treatment which is similar to UK funds.

To become a UK Reporting Fund the Fund Manager would need to successfully apply for the status through HMRC as well as, meet certain criteria and obligations.

Because these funds are based offshore you must declare certain income from these Funds on your tax return each year – this is called Excess Reportable Income. Excess reportable income is the value an offshore fund earns past the point of income they distribute as dividends or interest.

If you invest in funds classed as UK Reporting Funds then you must declare certain income from these on your tax return each year – this is called Excess Reportable Income.

How will I know whether I have invested in a UK Reporting Fund?

HMRC have provided a list of all UK Reporting Funds on their website . You’ll need to check if any of the funds you invest in are on this list.

How can I check for Excess Reportable Income (ERI) in these funds?

Details of this Excess Reportable Income will be available on each fund manager’s website.

What if I hold Reporting Funds in my ISA or SIPP?

There is no need to declare Excess Income on your tax return if you invest in the funds in your ISA or SIPP.

What do I need to do?

  • Check if any funds you invest in are UK Reporting Funds
  • Check if they have any Excess Reportable Income (ERI)
  • Calculate the Excess Reportable Income
  • Include the amount calculated on your tax return

How can I check for Excess Reportable Income (ERI) in these funds?

Details of this Excess Reportable Income will be available on each fund manager’s website.

How do I calculate the Excess Reportable Income?

Most fund managers give details of how to calculate the figure on their website and you should follow their instructions.

As a simple guide the calculation will be: (number of shares or units held) x (excess reportable income given) = figure to declare on your tax return.

You will need to use the Excess Reportable Income figure for the “reporting period” you held the fund and may need to make an adjustment if you made a new investment in this period. You should check with the fund manager if you are unsure.

What’s the significance of a funds “reporting period” on their website?

If you are invested in a UK reporting fund on the last day of that reporting fund’s “reporting period” the excess reportable income figure shown on the next report they publish will be what you need to use. This is usually 6 months later.

For example, a fund has a reporting period which ends on 31 December 2018. If you held that fund on 31 December 2018 the next report published by them in June 2019 would be relevant to you. This report date is a called the Fund Distribution Date and affects when you should include the figure in your tax return.

When do I need to include the Excess Reportable Income figure in my tax return?

You need to include the Excess Reportable Income figure in your tax return for the period where the Fund Distribution Date falls.

For example, if you calculate that you have excess reported income to include in your tax return based on the information in a report provided by the fund dated 30th June 2018 then you would include this in your tax return for the tax year ending 5th April 2019.  

What do I include in my tax return?

We don’t show the Excess Reportable Income on your Consolidated Tax Certificate (CTC) – we only show any income you have received directly.

The Fund Distribution date will be used to determine the tax year the income relates to (six months after the reporting fund period end date).

If you complete a tax return under self-assessment you must report this income on your tax return. You should refer to the Tax Return GuidePDF opens in a new browser window provided by HMRC to understand how the income will be reported.

If you do not complete a self-assessment return, dependant on your own personal circumstances you may need to register for self-assessment and subsequently report this income.

Our Share Dealing service does not provide advice so if you are in any doubt about making your own investment decisions we recommend you seek advice from a suitably qualified financial adviser. Please remember the value of an investment and the income from it can go down as well as up and you may get back less than you originally invested.