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Unit trust - interest re-invested, not 'received'?

Unit trust - interest re-invested, not 'received'?

A client holds a number of shares in a unit trust which distributes interest rather than dividends. 

Rather than being 'paid' the interest, however, the distribution is re-invested into the fund to increase the unit value. 

Does the distribution count as 'interest received' for the purposes of their tax return? TRG7 is not helping me!

Many thanks, 


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22nd Jan 2013 11:53

Interest re-invested

The short answer is "yes."

It does not matter that the interest was re-invested rather than paid out.

HMRC guidance notes are cunningly designed to keep Chartered Tax Advisers in business!


Thanks (1)
By vicadm
22nd Jan 2013 12:23

Cunning indeed.

Many thanks - this is the first year in which my client has been sent tax vouchers, so I may need to go back to prior years as well. 

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