Deferred Compensation Performance - Income or Capital Gains?

[onowntry]

Hi, hopefully a simple question, but aware that is often not the case.

As an employee part of my compensation is deferred & vests over time. The deferred portion is invested by the company on my behalf in an offshore fund (or other risky investment vehicle of their choosing).

Obviously the initial deferred amount is taxable as Income. However, the question is - are any realised gains from the investment taxable as Income or as Capital Gains once this vests? Naively I would have expected these to be taxed as Capital Gains since I have genuine risk on this portion, e.g. the value could just as easily fall as it could rise.

Also - follow up questions:
- Does the specific investment vehicle that the company chose to invest in matter?
- If taxed as Capital Gains - how would one go about claiming it back, since I expect this will all just go through PAYE & initially be taxed as Income by HMRC.

Thanks very much!

[darthblingbling]

Sounds like might be caught under disguised remuneration so the gain would be treated as additional employment income.

[onowntry]

Sounds like might be caught under disguised remuneration so the gain would be treated as additional employment income.

Hmm, thanks. Why would this be disguised renumeration though? I'm paid X today, this is invested in an asset which yields an uncertain return, I could in fact lose money on it. I can understand how someone could use a structure like this to do something sneaky - but in my case this is genuine risk & therefore it should be a capital gain on the performance no? Or is that just not how the tax system works...