UK Property Bond

I invested in a 3-year property bond issued by a Developer to fund the construction of new houses. 'Growth' of 30% is paid when the bond matures. As there a risk of losing the investment and it is not covered by the FCA the Developer's tax advisors considers the growth is subject to CGT not Income tax is this correct?

Hi
Property bonds are classed as corporate bonds, or loan notes, and are considered under Capital Gains legislation. Such property loan notes may be either qualifying corporate bonds (QCB's) or non-qualifying corporate bonds (non-QCB's).
A QCB is exempt from Capital Gains Tax whereas a Non-QCB is not.
You might wish to review the guidance in the Capital Gains Manual, at reference CG53702P (see link below) or seek professional tax advice to fully understand the tax treatment of your investment.
  (Capital Gains Manual: Shares and Securities: Qualifying corporate bonds: Definitions, exemptions and assets that are treated as qualify).