Capital gains tax on Indian Mutual Fund

Dear Sirs, I had a mutual fund which matured in 2022. The £8000, maturity value from the disposal was placed in a non resident Indian bank account in India where it still sits. The bank has emailed me to provide a self declaration under the Indian Income Tax Act, FATCA/CRS otherwise I will be liable for any charges that are levied on them by the government. I wasn't intending to submit a tax return as I am PAYE and the amount of £8000 falls within the CGTA for 2022/23. I am unsure what I need to provide to my Indian bank to satisfy them that I have declared this income. Your guidance would be greatly appreciated.

Hi
The  interest that arises from your mutual fund maturing, is taxable in the UK, as foreign income, not foreign capital gains.  
As it is foreign income, it must be declared, in pounds sterling in a self assessment tax return on SA106.

Thank you Admin 10, Forgive my ignorance but are you saying a mutual fund maturing is based upon an interest rate? My understanding is that it is invested in a fund which can increase or decrease and thus I believed it was CGT. My father purchased the fund in my name for me as a present.

Hi,

The main effect for UK investors who have invested in non-reporting funds, as opposed to reporting funds, is that on disposal of their interests they will be liable to tax on any gain arising as if it were income (that is, an offshore income gain, or ‘OIG’) instead of as a capital gain.

There are certain exceptions to this, please see IFM13400 onwards. 

IFM13400 - Offshore Funds: participants in offshore funds: the charge to tax on disposal of an interest in a non-reporting fund

Thank you.

Further to HMRC Admin 32's response, can you please advise where in the SA106 self assessment section I should enter the FTCR related to gains on disposal of non-reporting funds. As far as I can tell, there is no box on that "Other overseas income and gains" page.

Hi,
Non reporting funds are treated as 'offshore income gains' and are subject to income tax and not Capital Gains Tax. The gains should be entered in box 41 of SA106 and in the box marked "Other overseas income and gains" on the online return. Any FTCR should be entered at box 2.
Thank you.