Income portfolio opinions

[Alaric]

Being classed as "foreign income" in itself has nothing to do with whether you can trade an IT/IC or not and, if held outside of a tax shelter, it makes no difference to your income taxes other than having to put it in a separate box in your self assessment.

Taking a brief look at the HL link, it appears this fund holds corporate bonds and similar to generate income. I think the Channel Isles location is chosen so that it makes distributions in the form of dividends. With the changing rules on dividend taxation that may not be an advantage for unsheltered holdings.

[mc2fool]

Being classed as "foreign income" in itself has nothing to do with whether you can trade an IT/IC or not and, if held outside of a tax shelter, it makes no difference to your income taxes other than having to put it in a separate box in your self assessment.

Taking a brief look at the HL link, it appears this fund holds corporate bonds and similar to generate income. I think the Channel Isles location is chosen so that it makes distributions in the form of dividends. With the changing rules on dividend taxation that may not be an advantage for unsheltered holdings.

I'm not sure I get what you're saying. I think that any collective has to hold at least 60% fixed interest for its distributions to be classed by HMRC as "interest" rather than "dividends" and I don't think its domicile changes that. In the case of this fund according to the AIC's portfolio page for it it's only 34% bonds with the rest being a somewhat mysterious "other".

Also not sure what you mean about the changing rules on dividend taxation; tax on dividends is still a lot less than tax on interest.

[Alaric]

Also not sure what you mean about the changing rules on dividend taxation; tax on dividends is still a lot less than tax on interest.

The amount of tax free dividend is being reduced, the amount of tax free interest remains the same.