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A simple question on DRP & Tax

This it will likely be a easy one (excuse my lack of awareness) however I will be able to’t uncover the answer.

Say I’ve $10okay invested in VAS.

I’ve elected complete participation (DRP) as my reinvestment choice.

How does this have an effect on my taxable source of revenue yearly?

Explanation why I ask is I see many long run ETF funding methods cite a complete reinvestment plan till retirement, upon which you’ll simply take the dividends as an alternative as source of revenue to reside off.

While nonetheless the use of a DRP plan, it will have to nonetheless cause a CGT match anyway and as such, that is taxable source of revenue. Right kind?

If that is the case, a large number of those methods for DRP are superb on a 10okay funding (the tax will probably be manageable along common source of revenue).

What the hell do you do if you end up getting dividend payouts on a 500okay funding that yields (confidently) 30-50okay taxable source of revenue although? Are other people in point of fact copping a 20okay+ tax invoice yearly, paying that out of normal source of revenue and now not touching their DRP reinvested stocks?

That is a lot of tax and if you are electing DRP not to take income however simply extra stocks, how do you successfully set up the tax invoice then with out promoting stocks yearly to hide the tax invoice, copping the dealer charge and purchasing extra stocks with what is left?

That is the a part of the ‘reinvest till retirement’ technique that I am in point of fact at a loss for words on atm as I have now not observed it defined anyplace obviously.

Any skilled assist / comments / recommendation is liked!

 

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