In a letter to shareholders, M&G explained that the December distribution would be lower than shareholders were expecting because an additional tax payment had been deducted, accounting for an underpayment of tax in the April and November distributions.
The administrative error and remedial action had no tax implications for investors regardless of whether they were held in a tax wrapper, with the total return on shares in Stefan Isaacs’ £1.35bn fund unaffected.
M&G retail chief operating officer Laurence Mumford said to prevent this type of error happening in future the group increased the frequency at which tax deductions were being monitored and controlled.
A further statement from the group said: "We apologise for any inconvenience this may cause and have also written to all affected investors to explain why the December distribution may be a bit lower than expected.
"We have acted as swiftly as possible to rectify the administrative error, in accordance with the FCA regulatory rules.
"Additionally, the reduction in distribution counterbalances the equivalent overpayment of distribution in August and November, therefore the fund has now paid the correct amount of tax to date."
