Hello and welcome again. Thank you for offering me for extra time involved.
Let us first understand what "Deemed" gains are all about.
Many years ago, Her Majesty’s Revenue and Customs (HMRC) introduced restrictions to limit a UK resident policyholder’s power to select and hold certain assets. This was done to stop highly personal assets being sheltered in an off shore bond and, as a result, obtaining a tax advantage. As such, where a policy holds assets which are deemed to be ‘offensive’
at the end of a policy year, the policy is viewed as personal portfolio bond (PPB) and subject to a ‘deemed gain’ tax charge, irrespective of whether there has been a gain on the policy or not.
NOW, we much shift our attention to the definition of "Offensive" asset.
Offensive assets are things which are ‘personal’ to the policyholder or rather, not freely available to anyone else, however, they can also be structured notes, unauthorised investment trusts and equities. HMRC provides detailed information, on their website, about what is and isn’t deemed to be an acceptable asset, more information can be found at the following link:
Now, coming to your query in specific, I do not deny that they too are structured notes and but they do not fall under the definition of "Offensive" asset BECAUSE -- one of the essential requirement / feature of an "Offensive" asset is -- that they are NOT freely available to general public.
YOURS is not such case as your type of structured notes are generally available to anyone who subscribes to such investment options and therefore they should not fall under the definition of "Offensive" asset and therefore come under the purview of "Deemed" gains.
This is how my interpretation goes about.
So far as offsetting is concerned, yes, this can be done. You may be able to mitigate some or all of the gain by applying Time
Apportionment Relief (TAR), further details on taxation of off shore bonds and the available reliefs can be found in our Guide to off shore bonds.
I am sure this would help.
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