Tax form - fund rebates?

[MikeyWorld]

I usually put the rebates from fund platforms and bank account "rewards" in the equivalent online version of Box 16 from page TR3 paper version

They seem to have "improved" the online form and I can't find it this year.

Where should I put it?

[scrumpyjack]

https://www.telegraph.co.uk/finance/per ... hback.html

According to this article HMRC are treating fund rebates as taxable but NOT cashbacks/discounts on bank accounts , credit cards etc.

[Lootman]

https://www.telegraph.co.uk/finance/personalfinance/borrowing/creditcards/10027264/Will-I-have-to-pay-tax-on-credit-card-cashback.html

According to this article HMRC are treating fund rebates as taxable but NOT cashbacks/discounts on bank accounts , credit cards etc.

The advice I was given mirrors this. If a "reward" or "bonus" is given in cash then it is taxable. And in a couple of cases I got a tax statement associated with such payments as if to reinforce the point.

But if you are instead rewarded by a gift card, a credit or the like, then it is not taxable.

This might explain the otherwise irksome tendency of companies to send you a gift card rather than a cheque.

[chas49]

According to the article it's not the method of reward/payment that is important

We put Hargreaves' claim to HMRC. They dismissed it as "nonsense". A spokesman said: "There is no question of tax becoming payable on cashbacks received from credit, debit and loyalty cards or any other kind of cashback payment."

He said fund bonuses were taxable because they were a "further taxable distribution from the fund, but in a different form". There was, therefore, "no read-across to cashback".

[scrumpyjack]

There is a long standing principle that you cannot make a profit out of yourself. So when some of your own money is handed back to you it is not a taxable 'profit'. This seems to have annoyed HMRC so they got round it by trying to classify such payments as 'annual payments' and taxing them on that basis. Hence a rebate of annual fees on a fund is now treated as taxable, even though it is simply some of your own money being handed back, because it is a recurring payment. I recall Hargreaves Lansdowne fought HRMC on this a few years ago. However a one off 'refund' is still not taxable so the payment that HL make to entice you to move your investments to them, which can be up to £500, is still not taxable.

[Gersemi]

There is a long standing principle that you cannot make a profit out of yourself. So when some of your own money is handed back to you it is not a taxable 'profit'. This seems to have annoyed HMRC so they got round it by trying to classify such payments as 'annual payments' and taxing them on that basis. Hence a rebate of annual fees on a fund is now treated as taxable, even though it is simply some of your own money being handed back, because it is a recurring payment. I recall Hargreaves Lansdowne fought HRMC on this a few years ago. However a one off 'refund' is still not taxable so the payment that HL make to entice you to move your investments to them, which can be up to £500, is still not taxable.

Hargreaves Lansdown are in dispute with HMRC about this. They won at Upper Tribunal in March last year, but HMRC appealed, so it is still in litigation.
https://www.moneymarketing.co.uk/hargre ... ax-battle/

[Alaric]

Hargreaves Lansdown are in dispute with HMRC about this. They won at Upper Tribunal in March last year, but HMRC appealed, so it is still in litigation.

HMRC's position is unreasonable. If a fund earns 5% which could be distributed, takes 1% as a charge, your tax is based on the 4% distributed. If the charge is 3/4%, you are taxed on the 4 1/4% distributed. The same tax effect should apply if the charge is 1%, the distribution is 4% and there's a 1/4% rebate. So add the rebate in to the dividend, so it's tax free if within the £ 5000/£ 2000 dividend limits.