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Topic: UK Reporting funds – Excess reportable income  (Read 206 times)

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UK Reporting funds – Excess reportable income
« on: April 16, 2019, 10:13:34 PM »
I am a dual UK/US citizen, recently returned to live in the UK after 20 years in California.  I am hoping for some feedback related to income reporting for US domiciled/UK reporting fund investments – particularly with Vanguard, recommended to avoid UK and US offshore tax issues.  I already hold one of these, an S&P 500 Index fund ETF, VOO, as an example.

I have questions on excess reportable income – income retained and not distributed by the fund.  The amounts may be small for ETFs like VOO, but must still be reported to HMRC.  Funds should provide information to investors, but from what I read, that is not always the case.  I looked for information from Vanguard and for US funds, I found this report  - newcomer link: https://advisors.vanguard.com/iwe/pdf/TIDQAUK.pdf [nonactive]   This 2017 document dates back to the year ending in Aug 2016.  Vanguard also referred me to my broker, Charles Schwab, who could only tell me the 2017 report is the latest they are aware of.

Has anyone found more recent income information for Vanguard US domiciled UK reporting funds?  Or are there other sources of information – I assume Vanguard must produce data to remain compliant?

I don’t think I can assume the excess reportable income for 2017 and beyond is zero in every case although most US ETFs do distribute nearly all income I think.  So another option could be to make an estimate of excess reportable income - possibly over reporting, but avoiding the prospect of filing an amended return later.

Or am I missing something obvious?  I tried calculating from annual reports, but could not replicate the data Vanguard has published to date (which may just be my poor understanding of the way excess reportable income is accounted for).

I am considering more use of these funds, but this lack of UK reporting data has me concerned about the overhead.

Thanks for any feedback on investing in Vanguard or similar funds.


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Re: UK Reporting funds – Excess reportable income
« Reply #1 on: April 18, 2019, 03:35:24 PM »
The following information might be of some assistance.

There are detailed rules to which a fund must agree as part of obtaining reporting status. These rules are summarised in HMRC’s manuals on Offshore Funds.

Two particular aspects are-
•   The information can be available via an accessible website, as an alternative to posting to investors.
•   The details of the information, which do not need to be individualised for each investor.
The above can be seen at OFM26100 and OFM26200 on HMRC’s website.


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Re: UK Reporting funds – Excess reportable income
« Reply #2 on: April 18, 2019, 10:07:34 PM »
•   The information can be available via an accessible website, as an alternative to posting to investors.
•   The details of the information, which do not need to be individualised for each investor.
The above can be seen at OFM26100 and OFM26200 on HMRC’s website.

Thanks.  I suppose Vanguard is complying in that information is available via their wesbite, its just not very timely.  HMRC also seem to accept  this may happen - in OFM27200 they state taxpayers may need to make estimates that can be amended later, if excess reporting information is not available. 

Making an estimate appears to be the only option until the excess income report is eventually produced.  The US Vanguard funds are still listed by HMRC as UK reporting, but I do wonder if they will remain so. 


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