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Posted Wed, 03 Apr 2024 12:57:41 GMT by Geoffrey T.
Off shore bond gains are treated as income for tax returns. Are the gains regarded as income for gifts out of surplus income?
Posted Wed, 10 Apr 2024 10:42:13 GMT by HMRC Admin 5

Please refer to HS265 Offshore funds

Thank you
Posted Fri, 19 Apr 2024 11:52:41 GMT by Geoffrey T.
HS265 Offshore funds does not address my question. We correctly report gains on our offshore funds as income. The only advice I can find is that income for gifts out of surplus income cannot include gains from bonds since these are regarded as capital gains not income. That is true for onshore bonds and any gains from them have to be reported as capital. Gains from our offshore bonds are correctly reported as income. It would seem therefore that they should also be regarded as income and used as such when calculating surplus income for gifts out of surplus income. I am simply asking for clarification since this does not seem to be addressed in any HMRC literature that I can find.
Posted Wed, 24 Apr 2024 10:34:48 GMT by HMRC Admin 25
Hi Geoffrey T,
The offshore fund is not classed as general income for the purpose of makiing gifts from general income -  A gift is exempt from IHT if it can be evidenced as follows:
that it was made as part of the normal expenditure of the transferor, and
that, taking one year with another, it was made out of their income, and
that, after allowing for all gifts forming part of their normal expenditure, the transferor was left with sufficient income to maintain their standard of living.
Thank you. 

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