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Where Taxpayers and Advisers Meet

Non-reporting offshore fund income gains

ms7dcml
Posts:10
Joined:Thu Mar 09, 2017 10:41 am
Non-reporting offshore fund income gains

Postby ms7dcml » Wed Apr 14, 2021 10:46 am

Hi, I'm looking for some advice regarding gains from an offshore non-reporting fund. I know that non-reporting fund status means that any gains will be treated as income but my question is whether there is any anti-avoidance legislation around 'bed and breakfasting' offshore income gains. If a gain is treated as capital then there must be 30 days between realising a gain and reinvesting to avoid a riskless utilisation of capital gains allowance. However, does any such 30-day rule exist if realising an income gain or would it be possible to realise the 'income' and reinvest immediately, effectively utilising the nil rate / lower rate band of income tax for a non-earner. Not sure if this question best sits in the income or capital forum.

Many thanks

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Non-reporting offshore fund income gains

Postby maths » Thu Apr 15, 2021 10:19 pm

The bed and breakfasting rules apply only for CGT, not income tax. In any event, it would seem difficult to argue two or more non-reportable offshore funds are fungible.

ms7dcml
Posts:10
Joined:Thu Mar 09, 2017 10:41 am

Re: Non-reporting offshore fund income gains

Postby ms7dcml » Fri Apr 23, 2021 11:40 am

Thanks for the reply. I'm not sure I follow the point about two or more offshore funds being fungible. The intention here would be to realise an income gain in an offshore fund and then immediately reinvest in the same fund. As you say, I believe the bed and breakfast rules are capital only so this should not apply.
Thanks

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Non-reporting offshore fund income gains

Postby maths » Fri Apr 23, 2021 3:37 pm

"Fungible" comment was a bit superfluous but was intended to indicate the B & B'ing applies to any assets (not just shares) where it is not possible to distinguish one asset from another eg shares; wine; etc.

However, still needs top be capital gains not income tax gains.


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