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Introducing the LemonFools Personal Finance Calculators

Inc or Acc in ISA?

Closed-end funds and OEICs
granretire
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Inc or Acc in ISA?

#145262

Postby granretire » June 12th, 2018, 5:27 pm

What are Lemon Fools views on whether to go for income or accumulation when chosing an OEIC held in an ISA?

Jabd2001
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Re: Inc or Acc in ISA?

#145264

Postby Jabd2001 » June 12th, 2018, 5:29 pm

Generally I go for acc, as no need to account for dividends or capital gains, so just easier. Unless you want to withdraw income of course.

swill453
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Re: Inc or Acc in ISA?

#145278

Postby swill453 » June 12th, 2018, 6:11 pm

In an ISA there wouldn't be any tax to account for.

I don't think it'd make much difference. If you go for income units, you'd have cash easily available to withdraw, or invest in something else.

Personal preference.

Scott.

JohnB
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Re: Inc or Acc in ISA?

#145281

Postby JohnB » June 12th, 2018, 6:20 pm

Acc, less admin, unless you are a keen rebalancer who likes a cash flow to move around

ap8889
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Re: Inc or Acc in ISA?

#145287

Postby ap8889 » June 12th, 2018, 6:54 pm

Outside a tax wrapper, inc every time. My head is melting trying to workout the income tax due on my dealing account because I had a fat-fingered moment and bought Vanguard LS100 acc by mistake...

Dod101
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Re: Inc or Acc in ISA?

#145304

Postby Dod101 » June 12th, 2018, 8:21 pm

As teacher used to say 'Answer the Question!' :D

The OP said 'held in an ISA'. It makes no difference has someone may have already said because there is no tax to worry about. So it depends if you want to draw an income or not.

Dod

tjh290633
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Re: Inc or Acc in ISA?

#145393

Postby tjh290633 » June 13th, 2018, 9:30 am

If you are not drawing the dividend income, then go for accumulation units. You should be able to convert to income units when the time comes. If there is an initial charge when buying new units, then avoiding reinvestment of dividends may save some money.

If you wish to reinvest the dividends elsewhere, then income units are the ones to have.

TJH

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Re: Inc or Acc in ISA?

#145536

Postby b0f77 » June 14th, 2018, 7:50 am

Does it make any difference when rebalancing within the ISA? For example, if you held income units which paid out once per year but you rebalanced and sold them before the payout / ex-dividend date would you have been better off with accumulation units where the dividend income is reflected in the price? Topic for research...

tjh290633
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Re: Inc or Acc in ISA?

#145541

Postby tjh290633 » June 14th, 2018, 9:01 am

It all depends on who manages your ISA? If it's a fund manager, there is one answer. If it's a broker, there are different answers for each one.

Look carefully at the T&C's to find the answer.

TJH


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