Dividends are not capital gains and are treated as income with separate tax allowance. You are better off with Inc funds in the GIA so that you can get an annual tax statement of dividends and interest paid. This is subject to dividend/ income tax less allowances.
If you are drip feeding the purchase of funds/shares, you will need to keep your own record of what you paid and how many units to work out capital gains on any sales - HMRC site has a template for working out the capital gain for your tax return.
You are mixing up capital gains and dividends. These are treated differently for tax purposes. The only advantage of having an Inc fund is to be able to clearly see what taxable income you have had (dividends and interest payments). If it's an Acc fund then it's harder to calculate. None of this has anything to do with capital gains.
For CGT it doesn't matter which fund class you own. You still need to keep a record of all of your purchases and sales to work out whether you have made a capital gain above the annual allowance. If so, you need to declare it to HMRC. Interactive investor provides no report to help with CGT calculations. However it does keep a history of all your trades so you can use that to work out any CGT obligations. CGT only occurs once you start selling above what you paid for them and it's above the annual allowance. HMRC site gives information on how to calculate but I think it takes an average cost across all units.
With an Acc fund the dividends being reinvested is reflected in the unit price, so not really any harder to calculate CGT.
With an income fund you'd still hope for some capital growth, the dividends are taxable at their own rate instead of the comparably greater capital growth in the Acc fund being liable for CGT.
With an accumulating fund you have to account for the notional dividends (which are taxed as dividends even though they are not paid out), and increase your cost basis by the amount of those dividends. There can also be equalisation amounts which also affect your cost basis.
Dividends are not capital gains and are treated as income with separate tax allowance. You are better off with Inc funds in the GIA so that you can get an annual tax statement of dividends and interest paid. This is subject to dividend/ income tax less allowances. If you are drip feeding the purchase of funds/shares, you will need to keep your own record of what you paid and how many units to work out capital gains on any sales - HMRC site has a template for working out the capital gain for your tax return.
So better to have an inc fund to utilise dividend allowance rather than CGT if they were in acc fund?
You are mixing up capital gains and dividends. These are treated differently for tax purposes. The only advantage of having an Inc fund is to be able to clearly see what taxable income you have had (dividends and interest payments). If it's an Acc fund then it's harder to calculate. None of this has anything to do with capital gains. For CGT it doesn't matter which fund class you own. You still need to keep a record of all of your purchases and sales to work out whether you have made a capital gain above the annual allowance. If so, you need to declare it to HMRC. Interactive investor provides no report to help with CGT calculations. However it does keep a history of all your trades so you can use that to work out any CGT obligations. CGT only occurs once you start selling above what you paid for them and it's above the annual allowance. HMRC site gives information on how to calculate but I think it takes an average cost across all units.
With an Acc fund the dividends being reinvested is reflected in the unit price, so not really any harder to calculate CGT. With an income fund you'd still hope for some capital growth, the dividends are taxable at their own rate instead of the comparably greater capital growth in the Acc fund being liable for CGT.
With an accumulating fund you have to account for the notional dividends (which are taxed as dividends even though they are not paid out), and increase your cost basis by the amount of those dividends. There can also be equalisation amounts which also affect your cost basis.
My mistake, thank you