Tax on money brought into the country

[Flibbet]

I sold my house in 2008 with the intention of moving abroad for my retirement. I engaged an IFA to help me get the best from the money, and he advised putting it into offshore bonds, as I would eventually be using the money outside of the UK. At that time, I was still at work, but I retired a couple of years ago. As long as the money was offshore, I did not pay tax on any gains.
Circumstances have changed, and I did not leave the UK, and no longer have any intention of doing so, so I repartriated the funds this year, and must now pay tax on the gains.
My question is about the period on which gains must be paid. Do I have to pay tax on all gains since 2008 because the money all appeared in the country at once, or do I only have to pay tax on gains made over a certain period? If so, can somebody please tell me what the period is?

[bd6759]

Hiding money offshore does not make it non-taxable.

You ought to have paid tax on the income and gains each year in which they arose. I suggest you engage a tax investigation specialist who will help you make a disclosure to HMRC.

[LozaACCS]

No,No,No, ridiculous comment, utter rubbish, a discredit to the forum.

First of all you have committed no crime, you need not make any disclosures and you will not face any sanction.

You have invested into an offshore product, in this case I suspect it is a non qualifying policy, the tax treatment is at S.476 ITTOIA 2005.
When you en cash a segment, (most of these policies are segmented) you are liable to IT on the gain arising on the segment, the gain will be the MV when you en cash it less its original cost.
Such policies allow a 5% tax free withdrawal PA, if you have made any such withdrawals then these must be added to the disposal value.
The policy carries a 20% tax credit so you will be liable to IT only if you are a higher rate or additional rate tax payer, if the gain straddles the basic and higher rate bands, top slicing relief will be available.

The only adviser you need to talk to is someone who understands how offshore products are taxed.

[bd6759]

No,No,No, ridiculous comment, utter rubbish, a discredit to the forum.

Obviously I do not have the benefit of your crystal ball to determine the product. I read that the product was a bond - the clue being "I put it into offshore bonds" . If it is a life policy there will still be taxation consequences, but maybe not as severe as I imagined.

[LozaACCS]

If it is a bond then the rules I described are in point, if it were an offshore fund then the tax treatment would depending on whether it was a reporting fund, the law in that case can be found at ss354-363 TIOPA 2001 SI 2009/3001.
Whatever the product is you cannot go around brandishing people as tax evaders simply because they have invested offshore.

[bd6759]

UK resident invests offshore. UK resident does not declare income, gains or whatever from said investment. UK resident says "I kept the money offshore so that I do not need to pay UK tax." If there was no UK tax liability, it would not matter where he kept the money.

[LozaACCS]

You accused a person who invested in an offshore bond of being a criminal, ("You hid your assets abroad"), and then went on to suggest how he should declare and confess to his criminal activity.
You should apologise to the OP for this grossly offensive and ridiculous remark (if you cannot see this then frankly you you should consider whether you are a fit and proper person to contribute to this forum.)

I would invite the OP (unless he has already fled the country) to provide details of his investment after which we can all display our knowledge, a subject in which I believe on the basis of your comments to date you have little or none.

[bd6759]

You are the one who mentioned criminal. I suggested there was a tax liability and he should seek advice on how best to disclose it.

Get over yourself. Whilst I agree with a lot of the answers you give in this forum, some are well off the mark. Once you develop some humility you might recognise that you are not always correct. Until then, get off that high horse. It is dangerous up there.

[Flibbet]

Thank you, Loza. I read the comment from bd6759 in much the same way you did. "Hiding money offshore" and "You ought to have paid tax on the income and gains" seems pretty accusatory to me! In fact, the money was never hidden - I regularly mentioned it to the HMRC self assessment advisers I spoke to, and I was never told that I should be paying tax on it. If tax evasion was my goal, I would not now be asking - on a public forum!! - for advice on what tax I owe!

It was my understanding from the beginning that if I elected to move abroad and move the money into whatever country I went to, then I would pay tax on it there; if I decided to stay in the UK and repatriate the funds, then tax would have to be paid on any profit it had made. That is now my situation. Nothing underhand has happened, and I am not trying to evade tax. I just don't want to pay more tax than is due, so I'm asking about what *is* due.

Thanks for the advice, Loza, but may I ask for a little more clarification? I did repatriate some of the money about 5 years ago to buy a house, and I paid tax on that at the time. I have never made any other withdrawal from it, so the 5% PA is irrelevant. I have added to the amount, however, by consolidating other savings that I had in the UK and adding them to the same fund. The fund, incidentally, is made up of shares from around the world, managed by an investment manager. It is not a life insurance policy. Do I have to pay tax now on all gains made since 2008, or is there a cut-off point? I believe that for normal tax affairs, HMRC will only charge up to five or six years back? I don't know the period, but whatever it is, would it apply to me here?

[LozaACCS]

It appears that you hold an offshore fund and acquired it prior to 1st December 2009, such funds allowed "offshore roll up"which effectively allowed income to be turned into gains.
Interest or dividends were not paid to investors, instead the income was accumulated (rolled up) and distributions were charged to CGT.
The products were popular and often promoted by banks.
Anti avoidance rules meant that unless the fund had "distributor status" then any distributions in an accounting period were charged to income tax rather than CGT, this is probably why you paid tax on the earlier withdrawal.
The IT liability now (assuming the anti avoidance rules apply) will be on any growth in the remaining fund since 2008, the fund manager will normally do this calculation for you.
The concept of distributing funds changed post 01/12/2009, now such funds are either reporting or non reporting funds, it is possible for pre Dec 09 funds to register as a reporting fund, you should speak to the fund manager to ascertain whether any such elections have been made.