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Understanding Equalisation

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Rev. Green | 11:08 Fri 23rd Aug 2024 | Personal Finance
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Can anyone explain equalisation?

If I buy an accumulating tracker fund for £100 and sell it for £110, the end-of-year tax voucher might say: Interest £1, Equalisation £4. How much counts towards income and how much counts towards capital gains?

The explanations that I have seen make no sense when equalisation exceeds income.

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Avatar Image ToraToraTora

The £1 and £4 count as income, £5 in capital gain.

11:19 Fri 23rd Aug 2024
Avatar Image ToraToraTora

It's because part if the unit price included dividends on the shares comprising it. That is income and thus taxed as income.

11:20 Fri 23rd Aug 2024

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