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Posted Sun, 02 Oct 2022 21:01:59 GMT by 510
Hi I'm currently holding some offshore mutual fund investments in Hong Kong - some are reporting funds, some are non-reporting funds and some are special category transparent funds. With reference to: https://www.gov.uk/hmrc-internal-manuals/investment-funds/ifm13100 For non-reporting funds, is it correct that: - fund distributions (in cash or reinvested) should be treated as untaxed overseas income; - profit/loss when redeeming these non-reporting funds should also be treated as untaxed overseas income ? What if the total amount of transaction profit/loss + distributions is negative for the tax year? Should I report the negative total amount as untaxed overseas income? For reporting funds and special category transparent funds, is it correct that: - fund distributions should be treated as untaxed overseas income - profit/loss when redeeming these reporting funds should be treated as investment capital gain/loss ? Many thanks!
Posted Wed, 05 Oct 2022 13:01:16 GMT by HMRC Admin 17

Hi,
 
Please refer to further guidance at :

Investment Funds Manual    .

Thank you.
Posted Wed, 05 Oct 2022 13:38:08 GMT by 510
Thanks for your reply. For example, if I'm holding 4 funds: Fund A (non-reporting fund): cost base is £100, there is a distribution of £1 in the tax year and I sold it at £90. Fund B (non-reporting fund): cost base is £100, there is a distribution of £2 in the tax year and I sold it at £101. Fund C (reporting fund): cost base is £100, there is a distribution of £3 in the tax year and I sold it at £70. Fund D (transparent fund): cost base is £100, there is a distribution of £1 in the tax year and I sold it at £120. Is it correct that I should report as follows? (£90-£100) + £1 [from Fund A] + (£101-£100) + £2 [from Fund B] + £3 [from Fund C] + £1 [from Fund D] = -£2 (which is a net loss) as overseas income and (£70-£100) [from Fund C] + (£120-£100) [from Fund D] = -£10 (which is a net loss) as capital gain/loss Thanks again! PS: For transparent fund, I'm referring to "Whilst this means that such funds will have to monitor their underlying investments, it allows them to avoid the need to apply for reporting fund status. UK investors will be charged capital gains tax or corporation tax on a capital gain arising, rather than incurring an offshore income gain, provided the fund has complied with regulation 29(2))." as stated in https://www.gov.uk/hmrc-internal-manuals/investment-funds/ifm13470
Posted Wed, 12 Oct 2022 11:39:00 GMT by HMRC Admin 20
Hi 510,

HMRC cannot comment on hypothetical scenarios, you may therefore wish to telephone for specific advise on 0300 200 3300.

Thank you.

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