CHY
Posted: August 9th, 2020, 4:06 pm
I used to hold some Calamos Convertible US stock/fund holdings CHY, that paid around 10%/year dividends, on a regular monthly basis. Yes it is relatively high management costs, and could be more a case of return of capital, but it seems to hold up OK and with some trading can work out well. Used to be a great holding for me some (many) years back, I used Lichello's AIM to add on the dips/reduce on the peaks and it worked out OK. I think now however, since FATCA as its a 'fund' and isn't UK reporting registered my understanding is that any capital gains are also counted as being income rather than capital gains by HMRC?
Is my understanding correct that outside of a ISA, in a standard trading account and for a 20% basic rate taxpayer the dividends would incur just a further 5% tax payable to HMRC in reflection of the 15% US dividend withholding tax already paid?
Fundamentally was thinking about dropping £12K/year of income production amount (so around £120K) into it back in March for one of my young-adult sons who as of yet has no other sources of income, so a nice £1K/month regular income stream, but shied away. I guess in ISA it wouldn't be a issue either way, so could/should have dropped £40K into it across old/new fiscal years ISA allowances. But I'm not even sure whether that's even possible nowadays (to hold non reporting US funds inside a ISA?).
Is my understanding correct that outside of a ISA, in a standard trading account and for a 20% basic rate taxpayer the dividends would incur just a further 5% tax payable to HMRC in reflection of the 15% US dividend withholding tax already paid?
Fundamentally was thinking about dropping £12K/year of income production amount (so around £120K) into it back in March for one of my young-adult sons who as of yet has no other sources of income, so a nice £1K/month regular income stream, but shied away. I guess in ISA it wouldn't be a issue either way, so could/should have dropped £40K into it across old/new fiscal years ISA allowances. But I'm not even sure whether that's even possible nowadays (to hold non reporting US funds inside a ISA?).