The equalisation payment is not treated as taxable income – it is a return of the investor's capital and will reduce the amount invested for the purposes of capital gains tax (CGT). It should be factored into the calculation of the acquisition costs for CGT purposes.

What is Equalisation on a tax voucher?

Equalisation is accrued income that is allotted to you when you either buy shares/units or switch between share classes during the period covered by your tax voucher. • Equalisation from buying shares/units may affect any Capital Gains Tax you have to pay when you eventually sell your investment.

Are accumulation units subject to income tax?

Dividends rolled up into your accumulation units are known as a 'notional distribution'. They are taxable in exactly the same way as income units. In other words, you owe income tax even on 'accumulated' income unless: Your dividend income is covered by your tax-free Dividend Allowance.