HMRC says bundled to clean share class switch will not incur CGT

Investors who switch from bundled to clean share classes will not have to pay capital gains tax as a result of transferring, new rules introduced by HM Revenue & Customs (HMRC) clarified today.

There had been fears HMRC may move to tax such transfers, but instead it has said the share classes will be treated as the same asset as the old, with capital gains tax deferred until any sale of the holdings. The change is part of regulations introduced by HMRC on Monday in connection with new tax transparent funds.  HMRC said the regulations were introduced in order to facilitate the move to clean share classes since it will defer one of the costs associated with switching to a share class with a different management charge.