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Accumulating ETFs and Excess Reportable Income : UKInvesting

Last year I was fortunate to max out my ISA so I decided to continue to invest in the same ETF (SWLD – SPDR MSCI World ETF) in a GIA. The fund is Accumulating and based in Ireland.

Had I realized the tax reporting complexities of doing this I would have stuck to “Inc” (distributing) funds domicile in the UK.

Here is my understanding: When investing in an accumulating ETF outside of an ISA/pension(in a GIA) income tax needs to be paid on “notional dividends”. Also, the fund may keep money aside instead of returning it as “notional dividends” and this needs to be reported as “excess reportable income” to HMRC.

I will need to complete the Foreign income section of the self assessment despite not actually receiving the “excess reportable income”.

I’ve taken a look at the fund reportable income report and it lists no distributions (not even notional) but a large amount of excess reportable income (0.3637 USD per unit).


1. Am I right in thinking that “notional dividends” aren’t relevant as the fund keeps all the underlying dividends aside as excess reportable income? So the income tax liable for 250 units would be:

250 units * 0.3637 USD = 90.93 USD

2. Can I use my dividend allowance (£2000) to cover excess reportable income? Or is it always charged at your standard income tax rate?

3. The great Monevator article on the subject says: “You count as receiving the excess income on the fund distribution date”. In this case the distribution date was the 31st September, I didn’t buy my first fund units until October so does none of this apply anyway?

Useful Links:

SPDR reportable income report

Monevator – Income tax on accumulation unit

Monevator – Excess reportable income


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