The Reinvest Yield preference allows the yield on investments (unwrapped investments and ISAs) to be defaulted to either reinvest or pay out annually.
Voyant is currently set, by default, to reinvest yields rather than pay them out annually, but this can be easily changed either at the default/preference level or on an individual account basis.
When this setting is ticked, yields will be reinvested and added to the cost basis of the investment. They will not appear as an inflow in the cash flow.
When this default preference is unticked, the yield will be paid out annually, as illustrated below in the Let's See > Cash Flow chart shown in its detailed view.
Yield payments will be shown as a category of income and a colour in the charts.
The yields paid annually will be shown on both the Cash Flow > Year View and Investments tabs of the chart details panel.
In either case, any taxes on these yields (interest or dividends) will be paid in the year they are received.
Like most preferences, this default setting can still be changed for the individual investments within a plan. You will find the Reinvest Yield setting for individual investments on the Investments screen, under> Growth
Growth = Capital Growth. Growth above and beyond the Purchase Value (i.e. the cost basis for the investment) is considered gains and will be taxed at the gains rate whenever gains are realised - i.e. usually when all or part of the investment is sold. Of course, CGT is calculated accounting for any previous capital losses on the ledger as well as the owner's (or owners') annual gains allowance.
Dividend Yield = Dividends paid and taxed annually at the dividend rate. If the Reinvest Yield option is ticked, the dividend will still be taxed annually at the dividend rate but not taken as an income. It will instead be reinvested into the fund and added to its cost basis.
Interest Yield = Interest paid on the investment, which is taxed annually as income (at income tax rates).
If you use asset allocations (i.e. model portfolios) to derive growth from market assumptions in the software, an asset allocation may or may not be inclusive of yield, depending on the market assumptions you use. The software's standard assumptions are not inclusive of yield, which means the asset allocation you choose relates only to capital growth. Any yield, be it interest or dividends, would need to be entered manually for the investment on the Growth panel.
Custom market assumptions may, however, be set to be inclusive of yields. How to add custom market assumptions.