Glossary · Fund structure
Accumulation vs income units
Accumulation units reinvest the fund’s income automatically; income units pay it out as cash.
The choice does not change what the fund invests in. It changes where the income goes, and therefore what the unit price series looks like over time.
Accumulation units make total return easier to read from the price alone. Income units require adding distributions back to see the full picture.
For UK tax purposes income is taxable when it arises in both cases, even where it is reinvested rather than received.
On Fundology: Accumulating and distributing funds by category
Related terms
- Total returnThe return of an investment including income (dividends or interest), not just the change in price.
- Share classA variant of the same fund with its own charges, currency or income treatment — and its own ISIN.
- Reporting fund statusAn HMRC approval for a fund based outside the UK under which a UK investor’s gain on selling is taxed as a capital gain, not as income.
More terms on fund structure
Definitions describe how a term is used on Fundology. This is information, not advice.