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Posted Mon, 05 Sep 2022 11:35:51 GMT by BrotherLuke
Hi, there is a bit of conflicting advice on how 'non-reporting' mutual funds are taxed. I want to confirm my understanding: 'Non-reporting' mutual funds are treated differently from 'reporting' mutual funds. Disposal of 'non-reporting' mutual funds are treated as income (not capital gains) and taxed as income on disposal (and any dividends should be declared and taxed when distributed). I this right? I ask because with my UK mutual funds I have to report automatically reinvested money every year as income and only the capital gained is taxed under CGT on disposal. This would mean 'non-reporting' overseas funds are taxed at a higher rate and a greater proportion but only on disposal.
Posted Thu, 08 Sep 2022 12:38:59 GMT by HMRC Admin 19

UK resident investors will be liable to UK tax only on income that has been distributed to them.  

Remittance basis taxpayers are only taxable on distributed income if it is remitted to the UK.

Thank you.
Posted Fri, 09 Sep 2022 09:39:25 GMT by BrotherLuke
Thanks. Can you confirm that the investment income would be treated as and taxed as per income tax (say 40%) and not at the lower Capital Gains tax bands? (for non-reportable funds)
Posted Mon, 12 Sep 2022 14:06:17 GMT by HMRC Admin 17

Given that you are liable to income tax (rather than capital gains tax) on income arising

re: disposal of your non-reporting mutual funds (Offshore Income Gains), the income in question will be taxed at your marginal rate.    

See links:

Investment Funds Manual    and :

Income Tax rates and Personal Allowances   .   

Thank you.                                

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