I received an ex gratia settlement from my broker for an investment product complaint. The settlement is £40000, while the cost of the investment I paid initially was £34000. There is no breakdown on the settlement amount. For the difference between the settlement amount and the investment cost (£40000-£34000 =£6,000.00), it is the compensation for loss of potential income/gain as it is a guaranteed investment . No interest compensation was paid. (1) Do I need to do tax reporting for £6000? (2) If so, is it under capital gain or income tax? The investment is still kept by me as it is illiquid and cannot be sold now. (3) In the future, if I am able to sell it, is it correct that I should report tax as capital gain based on the sales proceeds and zero purchase cost (as I have received the investment cost from the settlement amount)? And, I don’t need to report until the investment is sold? (4) If there is coupon income from this illiquid investment, though principal repayment or early redemption is not possible due to illiquidity, is the coupon treated as income or capital gain? Many thanks