Bond index fund - exempt from CGT?

[Dr Mike Oxgreen]

I’m in the middle of doing my annual Bed & ISA, selling out of my GIA with the intention of repurchasing back into my ISA on April 6th.

I always try to stay underneath my CGT allowance to simplify my tax return, and to ensure this I use Fidelity’s capital gains reporting tool, which usually updates within a day or two of any sell transactions to show you what your gain/loss is.

But there’s one transaction that hasn’t shown up in the report after more than a week, and I’m wondering why. The fund in question is Vanguard Global Short-Term Bond Index Fund GBP Hedged Acc

Other sell transactions that I did at the same time, as well as transactions that I’ve done since then, have all appeared in the capital gains report. But not this one.

Can anyone suggest a reason why? I know that some types of bond are indeed exempt from CGT, but I wasn’t expecting this fund to be exempt. Am I mistaken? Is this fund exempt for some reason?

[trevalvole]

I don't think it will be exempt from CGT, but perhaps you didn't make a capital gain on it? Looking at the annual performance data on the link provided, if you bought it in 2021/22ish then you may well have made a capital loss. Plus the performance listed may well be a combination (with it being an acc fund) of interest and capital gain/loss, so the actual capital gain/loss may well be worse than the figures indicate.

[Dr Mike Oxgreen]

True, although I only bought it within the current tax year and it has gained about 5.5%

Also, Fidelity’s capital gain reporting tool shows losses as well as gains.

[Dr Mike Oxgreen]

Just had a reply back from Fidelity…


Kindly note, the Vanguard Global Short-Term Bond Index Fund GBP Hedged Acc should not be exempt from Capital Gains Tax (CGT).

This might be a technical issue, so I have it escalated and will update you in due course. I apologize for any inconvenience caused.

[trevalvole]

Thanks for coming back with the answer.

[LeoSayer]

I know that Gilts are exempt from CGT but I'm not aware of any other bonds or bond funds that are exempt.

A large part of the gain you made on this fund will be income that you can deduct from your gain for CGT calc purposes. You need to find the dividend tax certificate you received from the fund. It is generally better to hold Inc units to avoid complicated CGT calculations.

[Jackals]

LeoSayer said:

I know that Gilts are exempt from CGT but I'm not aware of any other bonds or bond funds that are exempt.

Direct Corporate Bonds are also exempt from CGT in case that helps.