UK REITs and Property Authorised Investment Funds (PAIFs) pay a special kind of dividend known as Property Income Distribution (PIDs).

The UK tax system treats PIDs as property letting income. Consequently they are taxed at higher rates than ordinary dividend income.

Just to complicate matters further, REITs and PAIFs may pay a combination of PIDs and ordinary dividends.

The fund should make it clear how much you receive of each type on your dividend voucher.

As with ordinary dividends, the tax you’ll pay on your PID income depends on:

• Whether you receive the income within a tax shelter (an ISA or a pension)
• Your personal income tax rate

As always buying your property investments within a tax shelter is the way to go if you have the spare capacity for them.

Note: Specialist property index trackers (such as the iShares ETF with the ticker IUKP) funds pay ordinary dividends not PIDs. That’s because they are not UK REITs or PAIFs. They may receive PIDs from UK REITs that they hold. But by the time the income reaches you as a shareholder in the tracker fund it’s a dividend.

Property Income Distributions within a tax shelter

You do not pay tax on PIDs held within tax-sheltered accounts.

However, unlike ordinary dividends that are paid gross (that is with no tax deducted), PIDs are generally paid with 20% tax deducted.

This means that the tax already paid needs to be clawed back.

Your tax-sheltered account should be issued with a 20% tax credit associated with your PID income.

The broker that runs your ISA or pension should use this to reclaim the tax paid from the taxman.

Notice we said “should”.

Twice!

Keep your eyes peeled to ensure your PID tax is being reclaimed by your broker. Sometimes they forget.

It can take four to six weeks after the PID is credited to your account for the reclaimed tax to turn up as cash.

PIDs outside of tax shelters

Are you holding your PAIF and receiving your PIDs outside of a shelter?

Sounds painful!

And tax-wise it is, compared to if you’d held it within an ISA or a SIPP.

You’ll need to work out what tax is due on your PIDs and other share income when you submit your annual self-assessment tax return. (Avoiding all the resultant tedious paperwork is reason enough to justify an ISA.)

The first thing to know is that PIDs do not benefit from the tax-free dividend allowance.

Most UK taxpayers must pay the standard rates of income tax on PIDs:

• 20% – basic rate (22% from 6 April 2027)
• 40% – higher rate (42% from 6 April 2027)
• 45% – additional rate (47% from 6 April 2027)

(Rates can vary if you’re a Scottish or Welsh taxpayer.)

You should receive your PIDs with a 20% withholding tax already deducted.

• Basic-rate taxpayers have nothing further to pay
• UK higher-rate payers owe HMRC another 20% of the gross amount
• Additional rate payers must cough up 25%

If the 20% deduction means you’ve overpaid tax then you can claim it back from HMRC.

This may apply for instance if your PID income falls within your personal allowance, or within a sub-20% income tax band.

Do not record your PIDs on your tax return as ordinary dividends. HMRC’s tax return notes offer further guidance.

Incidentally, non-resident shareholders may be able to claim back some of the withholding tax that’s pre-paid on UK REITs.

That’s possible if you live in a country that enables you to claim back a portion of withholding tax on UK securities. See this explainer from HMRC.

You’ve finally had it. Your existing stocks and shares ISA provider has dropped a fee bomb and you’re outta there! But perhaps you haven’t experienced the stocks and shares ISA transfer process before? Life is busy after all. And those filthy bloodsuckers probably won’t let you go easily.

So – in the age of enshittification –  just how hard is it to transfer your stocks and shares ISA?

Here’s our quick guide to dumping your ISA provider.

Dear ISA provider… it’s not me, it’s you

You normally have three options for extracting your ISA from the clammy hands of the unworthy:

1. Cash transfer

Your current platform sells your assets and transfers the cash directly to your new ISA provider. You choose new investments from scratch, making this option good for a brand new start, if things have got a little, ah, messy.

• Your ISA’s anti-tax armour remains unbreached.

• It should take two to three weeks to transfer, but it can take longer.

• You are out of the markets as soon as your assets are sold and until you repurchase a fresh batch. That could go for or against you. No one knows.

2. Stock transfer

The existing contents of your stocks and shares ISA are transferred intact to your new provider. In other words, all your funds and shares are handed over without being sold or repurchased. This type of ISA transfer is often referred to as an in specie transfer, or as re-registration.

• Again, your ISA’s tax status is not compromised.

• It should take about four to eight weeks but you know how it goes.

• You remain in Mr Market at all times and are subject to his whims.

• You won’t be able to trade until the transfer is complete.

3. DIY sell-off

Of course, you can always flog your assets yourself and use the proceeds to open up a new account with another ISA provider.

• Your ISA’s tax powers are very much kyboshed in this scenario. ¹

• Transfer out fees are avoided, though perhaps not account closure charges. Also note some platforms will pay your transfer fees to secure your business.

• You’ll pay dealing fees to sell and buy anew.

• You’ll be out of the market for a few days.

Stock transfer: The nitty-gritty

Personally, I would use a stock transfer all day long. The annual advance of a market can occur in just a few days and I’d hate myself if I missed out.

However, there are a couple of potential snag-ettes to watch out for with the ol’ in specie manoeuvre:

• Contact your new provider and old provider to make sure they both play ball when it comes to in specie transfers.

• Check that assets in your old ISA are available in your new one. If not, then talk to your new provider. Otherwise, incompatible assets are likely to be sold.

• Different provider’s forms use different terminology to describe an in specie transfer. Check if you’re not sure which box to tick, and, whatever you do, avoid the box marked ‘liquidate’.

• Some providers impose a transfer out charge per fund or line of stock – just one last pound of flesh before you leave. Some new providers will pay these fees for you. (Occasionally, they might be waived. It never hurts to ask!)

To do list

If your old provider’s ‘just one last chance’ pleas have fallen on deaf ears and you’ve identified your new dream partner then completing your stocks and shares ISA transfer isn’t much more daunting than filling in a form:

• Complete the ISA transfer forms provided by your new platform.

• Ask your new provider if it will cover your transfer out fees.

• Tell your old provider to close your account once the transfer is complete. 

• Cancel your old direct debit and relax.

That’s about all you need to know. I’ve got a couple of bullet points left in the tips-gun though so let’s fire ’em off:

• Your new platform should tell you when your account has transferred.

• You can transfer your current year’s ISA, although new money can only be added when the transfer is complete.

• Transfers do not count towards your current year’s ISA allowance.

• You can even partially transfer an ISA. List the assets you’d like to transfer, though note that your old provider can refuse a partial transfer. 

• Document all your holdings (names, ISIN codes, quantities held) before you transfer. Take a screenshot of your holdings sitting in your old broker. This will come in very handy should any holdings go astray during the transfer.

That’s it. We’re done. Happy transferring.

Take it steady,

The Accumulator

1. In other more boring words, the money you had tucked away in the ISA loses its tax protection.[↩]

When I began planning my financial future, I became obsessed with nailing a realistic rate of return. All of the investment calculators required one.

Plus, everything else flowed from that number – such as how much I needed to save, and how long it would be before I could declare financial independence.

It seemed important. Because if I highballed the number then I was telling myself a fairy story, wasn’t I?

Eventually I read enough fusty old PDFs and insomnia-curing books to convince myself I had an answer.

The average inflation-adjusted rate of return for a portfolio of global equites was about 5%. More than 100 years of returns data said so.

You could dig up a similar number for bonds, too, and all the rest.

Do the maths, and hey presto! One time-tested, personalised rate of return.

Data mining

Then you get down to the hard work. Years of hacking away at the FI coalface. Celebrating when you hit a seam of double-digit returns. Face blackened when you’re scorched by a fireball of negative numbers.

But it’s the damnedest thing. That oh-so-achievable looking positive average return hardly ever turns up. Because investment returns are rarely average:

Data from JST Macrohistory ¹, The Big Bang ², Before the Cult of Equity ³, A Century of UK Economic Trends ⁴, St. Petersburg Stock Exchange Project ⁵, World Financial Markets ⁶, and MSCI. February 2026.

No matter how many annual return charts I see, I never get used to how nuts the variance is. Yet this carnival of volatility is a far better portrayal of the actual investment experience.

In the chart above, the blue line is the average annualised return for World equities 1900 to 2025. It currently stands at 5.6%. (All returns in this post are inflation-adjusted, GBP total returns).

However you can count on your fingers the number of annual returns that remotely resembled that figure. Across 126 years!

Which is fine and dandy when returns come in over the blue line: “Yay, I’m above average – maybe I’ll get to retire early?”

But it’s super-bleak whenever the bad years roll in. Then, everyone wonders if they’ve been sold a pup.

Optimism biased

Luckily a string of defeats doesn’t happen very often, as you can see from the chart. We haven’t experienced more than a single negative year in a row since the Dotcom Bust of 2000 to 2002.

Since then though, interest in DIY investing has exploded. I can only imagine the fear and loathing that’ll reverberate through the community if (when…) we suffer a sequence more like the 2000s, the 1970s, or the 1930s.

There’s no cure for human nature I suppose. But the Pollyanna problem has been on my mind lately, given nerve-janglingly extreme US market valuations.

Gold fingered

The wide variation of returns we see with equities holds too for every other asset class you can plausibly take refuge in. Such as gold…

Data from The London Bullion Market Association. February 2026.

Gold won the past decade. It’s also having a great year (so far).

Tempted? Beware that gold annual returns are certifiably insane.

The last 20 years have been amazing. But the 20 years between 1980 and the year 2000? Not so much.

Necessary historical footnote: The GBP gold price before 1975 was mostly either fixed or distorted by the impact of government regulation. Find out more in our deep dive into gold.

Show me the money

Data from JST Macrohistory ⁷, British Government Securities Database ⁸, and Millennium of Macroeconomic Data for the UK, ⁹. February 2026.

Cash operates in a narrower range, sure. Yet inflation and abrupt interest rate swings can send returns haywire.

I still wonder why everyone piled into money market funds when interest rates spiked in 2022. Had they forgotten the enormous cash bear market that raged from 2009?

Money markets lost over 27% from 2009 to 2023. Every year bar one was a loser. But it just didn’t feel like it because we don’t keep it real. (By which I mean inflation-adjusted!)

His skid mark materials

AQR ¹⁰, Summerhaven ¹¹, and BCOM TR. February 2026.

Commodities are even scarier than equities. Some 42% of years are negative versus just 30% for World equities. You need a cast iron stomach to withstand that level of volatility.

But also look at the number of years commodities returned over 20% – and even 40% – in comparison to equities.

The penny finally drops when you discover that bonza commodities years often occur when equities are in the toilet.

Commodities’ average return looks pretty good, too: 4.3% annualised. Then again, this asset class is the epitome of ‘anything can happen and it probably will’.

Gilt complex

Data from JST Macrohistory ¹², and FTSE Russell. February 2026.

Lastly, if not leastly, there’s government bonds – whose approval rating sank to Trumpian levels when gilts dished out their second-worst annual return on record in 2022.

All Stocks gilts (as featured in most UK government bond funds and ETFs) aren’t really much easier on the nerves than equities. Even worse, their average return is a miserable 0.76%.

The secret though is not to view bonds on their own. Bonds don’t make any sense in isolation. The magic happens when you throw them into a pot with other assets.

Kinda like how most people don’t eat raw chillies, but there’s widespread agreement that they add something to curries.

Enter the Pot-folio

Don’t even think about stealing my amazing new Pot-folio^TM idea. I’ve trademarked the bejesus out of it. (What’s that? “Just stick to the charts, mate…?”)

The improvement wrought by sufficient diversification isn’t totally obvious in chart form. The down rods are definitely fewer and stumpier, though.

However looking at the raw numbers highlights the difference more clearly:

	World equities	The Pot-folio
Annualised return	5.6%	5%
Deepest drawdown	-51.8%	-36.5%
Longest drawdown	13 years	10 years
% years -10% or worse	15%	9%
Volatility	16.2%	11.6%
Ulcer Index	18.4	9.8
Ulcer Performance Index	0.28	0.47

In exchange for giving up a little return, you get fewer and less severe down years. That means:

• Shallower drawdowns
• Shorter drawdowns
• Less volatility
• Better risk-adjusted performance

The Ulcer Index is a measure of downside pain that translates drawdown depth and length into a single metric. A lower number is better.

Portfolio Charts introduced me to the Ulcer Index as devised by Peter Martin.

The Ulcer Performance Index is a risk-adjusted performance ratio that divides the excess annualised return by the Ulcer Index number. Here higher is better.

You say portfolio, I say Pot-folio, you say “Go do one”

I haven’t spent time optimising the Pot-folio. It’s just an equity-tilted variant of an All-Weather portfolio.

Essentially, you maintain positions in assets that when combined can cope with most people’s shopping list of worries:

• Growth – equities
• Inflation – commodities, index-linked gilts
• Recession / panic – government bonds, gold, cash
• Stability / liquidity – cash

However, as much as everyone buys into the concept of diversification, it’s fair to say investors spend more time thinking about how to satisfy their immediate desires. Such as making bank as quickly as possible, if not quicker. Right up to the point that the risk chickens come home to roost – and crap all over the place.

So if you’re nervous about AI bubbles or whatnot, be bolder with your diversification. By which I mean, consider investing in asset classes that look painful when viewed in a vacuum, but that can be blended together to smooth out your ride.

This way you can aspire to be a bit more average most years – and if that means the difference between you staying invested for the long run and bailing out at some market bottom, it’ll make all the difference.

Take it steady,

The Accumulator

1. Jordà O, Knoll K, Kuvshinov D, Schularick M, Taylor AM. 2019. “The Rate of Return on Everything, 1870–2015.” Quarterly Journal of Economics, 134(3), 1225-1298.[↩]
2. Kuvshinov D, Zimmermann K. 2021. “The
   Big Bang: Stock Market Capitalization in the Long Run.” Journal of Financial Economics,
   Forthcoming.[↩]
3. Campbell G, Grossman R, Turner JD. 2021. “Before the cult of equity: the British stock market, 1829–1929.” European Review of Economic History. 25. 10.1093/ereh/heab003.[↩]
4. Chadha J, Rincon-Aznar A, Srinivasan S, Thomas R. “A Century of UK Economic Trends.” ESCoE, NIESR and Bank of England.[↩]
5. Radchenko P. “St. Petersburg Stock Exchange Project.” Yale School of Management, International Center for Finance.[↩]
6. Moore L. “World Financial Markets, 1900–25.” Working paper.[↩]
7. Jordà O, Knoll K, Kuvshinov D, Schularick M, Taylor AM. 2019. “The Rate of Return on Everything, 1870–2015.” Quarterly Journal of Economics, 134(3), 1225-1298.[↩]
8. Cairns A, Wilkie D, ESCoE Historical Data Repository. “Heriot-Watt / Institute and Faculty of Actuaries / ESCoE British Government Securities Database.” ESCoE.[↩]
9. Thomas R, Dimsdale N. 2017. “A Millennium of Macroeconomic Data for the UK.” Bank of England.[↩]
10. Levine, Ooi, Richardson, Sasseville. 2018. “Commodities for the Long Run.” FAJ.[↩]
11. Bhardwaj, Janardanan G, Rajkumar, Geert Rouwenhorst K. 2020. “The First Commodity Futures Index of 1933.” Journal of Commodity Markets. 2020.[↩]
12. Jordà O, Knoll K, Kuvshinov D, Schularick M, Taylor AM. 2019. “The Rate of Return on Everything, 1870–2015.” Quarterly Journal of Economics, 134(3), 1225-1298.[↩]