Brit investing in US startup with profit share

[vortice]

Hi,

I am a UK private citizen who has invested in a US startup software company. I have entered into a profit share agreement with the company who are setting up as an LLC. As i understand it, the two owners will be declaring profit/loss on their personal tax returns.

How will my returns on investment be treated for tax liability? I am presuming that my tax liability will be UK only? I spoke to HMRC today, but they weren't particularly helpful. Will returns be treated as income, in which case, can i offset the initial investment? Is there more than one solution here and what are the tax implications?

Thanks very much,

John