UK taxing of reinvested ETF vs realized gains

I am US based but occasional Dual resident. 2024 will be one of those years so I am planning to pay UK taxes too in 2024

My taxable ETF's are 'UK reporting' and like most funds I have the ability to choose to reinvest Div's and CG's - or not.

Does the UK treat automatically  reinvested Dividends and Capital Gains from taxable ETF's  as gains anyway ( like USA does) or do they ignore them because I did not realize the gain?

I am US based but occasional Dual resident. 2024 will be one of those years so I am planning to pay UK taxes too in 2024

My taxable ETF's are 'UK reporting' and like most funds I have the ability to choose to reinvest Div's and CG's - or not.

Does the UK treat automatically  reinvested Dividends and Capital Gains from taxable ETF's  as gains anyway ( like USA does) or do they ignore them because I did not realize the gain?

Both the IRS and HMRC will tax dividends and capital gain distributions regardless of whether or not they are reinvested. Unrealized capital gains is a different thing altogether.

Capital gain distributions are quite different to capital gains that occur when you actually sell shares. Within a fund the fund manager may buy and sell individual securities and those internal gains or losses have to be tracked and by end of year paid out as taxable capital gain distributions.

Unrealized gain is the difference the share price paid to buy and the current share price. Tax is only due if shares are sold to realize some gains. You may also sell shares at a loss and those losses can be used to offset other capital gains.

https://investor.vanguard.com/investor-resources-education/etfs/what-is-an-etf#:~:text=Just%20like%20mutual%20funds%2C%20ETFs,haven't%20sold%20any%20shares.

Just like mutual funds, ETFs distribute capital gains (usually in December each year) and dividends (monthly or quarterly, depending on the ETF). Even though capital gains for index ETFs are rare, you may face capital gains taxes even if you haven't sold any shares.

Yes 'realized' was a poor choice of words but I meant a gain that did not leave the fund ( hoping it would not count). Oh well....

Good news is my ETF's don't generate that much unwanted income so UK tax won't be too bad.

Thanks

Bill

Yes 'realized' was a poor choice of words but I meant a gain that did not leave the fund ( hoping it would not count). Oh well....

Good news is my ETF's don't generate that much unwanted income so UK tax won't be too bad.

Thanks

Bill

No problem.

I only have 1 ETF, all equities that generates quarterly dividends but has never distributed any capital gains.  Every year I sell some shares from that fund, keeping the capital gain from the sale below the tax free threshold,. Up until now the tax free capital gain allowance has been generous, £12,300 last year but that is being drastically reduced from now on. (£6,000 this year and I think £3,000 the year after)

https://www.gov.uk/guidance/capital-gains-tax-rates-and-allowances


Tax year   Annual exempt amount for individuals, personal representatives and trustees for disabled people
2023 to 2024   £6,000
2022 to 2023   £12,300   
2021 to 2022   £12,300   
2020 to 2021   £12,300   
2019 to 2020   £12,000   

No problem.

I only have 1 ETF, all equities that generates quarterly dividends but has never distributed any capital gains.  Every year I sell some shares from that fund, keeping the capital gain from the sale below the tax free threshold,. Up until now the tax free capital gain allowance has been generous, £12,300 last year but that is being drastically reduced from now on. (£6,000 this year and I think £3,000 the year after)

https://www.gov.uk/guidance/capital-gains-tax-rates-and-allowances


Tax year   Annual exempt amount for individuals, personal representatives and trustees for disabled people
2023 to 2024   £6,000
2022 to 2023   £12,300   
2021 to 2022   £12,300   
2020 to 2021   £12,300   
2019 to 2020   £12,000

Quick calc using these numbers:
$15k of ETF divs & $15k of Capital Gains  - call these £12000 each
CG  -6000 reduced to £6000
Divs  -1000 reduced to £11000
£12570 PA wipes out all the CG and leaves £4430 of divs taxed at 7.5% = £332 of tax

Unfortunately, it makes no economic sense for me to hire a Pro just to show me how to claim £300 back as a US treaty resident.
I have searched the Internet for examples on what to do but they all discuss US 'expats'  - not someone who is US treaty resident but paying UK tax too.

I would really like to figure this out vs just paying double tax so if anyone has any examples or links that fit please let me know.