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What tax considerations should I be aware of?

Updated over 2 months ago

Our Passive portfolios operate as a General Investment Account (GIA), not as a tax wrapper product such as an Individual Savings Account (ISA). Therefore, investing in these portfolios has specific tax implications, primarily concerning Capital Gains Tax (CGT).

Here's a breakdown:

Capital Gains Tax (CGT):

Capital Gains Tax may be incurred when:

  • We make trades on your behalf.

  • You sell your investments.

CGT may be applicable when the sale price of an investment is higher than its purchase price, with the taxable amount being the difference between these prices.

Annual Allowance: Each tax year, UK residents have a CGT allowance that enables gains up to a specific threshold to be tax-free. Gains exceeding this threshold are subject to CGT. For the 2024/25 tax year, the allowance is set at £3,000, down from £6,000 in 2023/24.

Capital Gains Tax Rates: Your applicable CGT rate depends on your total taxable income, as rates vary. For specific rate details, please refer to the HMRC website.

Reporting and Compliance: Accurate record-keeping of investments and transactions within your passive portfolio is essential for tax reporting purposes. At Sidekick, we provide the information you’ll need in time for your tax reporting requirements.

Taxation of Dividends and Interest: Dividends and interest income earned within the GIA may also be subject to tax. The tax treatment of dividends and interest will depend on factors including your total income and tax band.

This material is intended for informational purposes only, and we do not provide tax advice.

Tax treatment depends on individual circumstances and may change in the future. If you need additional assistance, please consult a tax advisor or specialist.

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