What funds for post retirement GIA?

[Rollin]

I'm planning my retirement finances and looking for options of how to invest a lump sum in a tax efficient manner.
I put the maximum in ISAs and SIPP that I can each year so I'm looking at putting most of the sum in a GIA.
What funds are best in a post retirement GIA with regards to tax and simplicity, income or accumulation? I'll be a high rate tax payer from my pension.

[Mr Pointy]

Income funds make tax return easier because they explicitly report gains made during the year - as do some accumulation funds but by no means all. In theory the actual tax payable should be very similar but it can be harder to work out with accumulation funds.

[Rollin]

Mr Pointy said:

Income funds make tax return easier because they explicitly report gains made during the year - as do some accumulation funds but by no means all. In theory the actual tax payable should be very similar but it can be harder to work out with accumulation funds.

Thanks.

[PoorCarCollector]

Surely it depends on if you want growth and only pay tax when you sell, or you need income from the investment and you'll pay tax on the dividends.

Low coupon gilts would be another good option

[Rollin]

Thanks for the PM

[Panamax]

Mr Pointy said:

Income funds make tax return easier....

But make sure you DON'T tick the "reinvest income back into the same fund" box or you'll find your CGT position turns into a nightmare.

The bottom line IMO is either,
Acc - so long as you don't need the income (just sell units when you need cash), or
Inc - and make sure you take the income in cash.

All of this needs to be juggled in the context of your personal tax position. Bear in mind that CGT rate remains lower than Income Tax rate and still carries a small annual tax free allowance.
18% tax is a bit less painful than 20% tax
24% tax is a whole lot less painful than 40% tax

[xeny]

Panamax said:

But make sure you DON'T tick the "reinvest income back into the same fund" box or you'll find your CGT position turns into a nightmare.

The bottom line IMO is either,
Acc - so long as you don't need the income (just sell units when you need cash), or
Inc - and make sure you take the income in cash.

If you consider reinvested dividends make for a painful tax return (my platform cheerfully tracks average purchase price, so this isn't so bad) how the heck do you deal with taxation of the dividends "embedded" in the acc units?

Panamax said:

All of this needs to be juggled in the context of your personal tax position. Bear in mind that CGT rate remains lower than Income Tax rate and still carries a small annual tax free allowance.
18% tax is a bit less painful than 20% tax
24% tax is a whole lot less painful than 40% tax

However with CGT taxation, over several years you end up essentially being taxed on inflation as well as actual gains., so while I agree about 24 vs 40% tax, I'm not so sure about 18 vs 20% tax.