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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I worked overseas for several years, I put some of the money

Resolved Question:

I worked overseas for several years, I put some of the money I earned into an offshore managed fund. I now work back in the UK, what are tax liabilities on that offshore account. It is currently -20% down on what I have paid in and I do not earn income from it.
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.

Hi.

Assuming you are a UK national and UK tax resident, then you are taxable on your worldwide income and gains, regardless of whether you bring any foreign source income or gains into the UK or not. Given that you have taken nothing out and the value of the investment is less than what you put in, there are probably no immediate tax concerns.

Obviously, I have no information on the type of investment you are referring to so I cannot go into specifics about what type of tax, income tax or capital gains tax, you would pay on any income or gains that may arise. The investment manager should be able to advise you on that.

If the investment is linked to an onshore or offshore life policy, then any withdrawals in excess of 5% of the original investment in a policy year (you can use unused 5% allowances from earlier years) would give rise to a "chargeable event gain". This would be liable to tax at 20% or 40% or 45% depending on the level of your income and you may also be entitled to top-slicing relief and a discount for the period you were not UK tax resident. You can read about chargeable event gains here and here.

I hope this helps but let me know if you have any further questions.

Customer: replied 3 years ago.

I am a UK national and UK tax resident. It is a Generali managed "Vision" fund. It is not linked to any life policy.


 


Am I right in thinking that I can let the value of the fund increase (assuming it does) back up to the value that I put in and at that point bring it back to the UK and not be liable for capital gains? Or is the capital gain worked out each year?


 


I hope the extra info I have provided allows you to give me a bit more detail.

Expert:  TonyTax replied 3 years ago.
If you save money whilst working outside the UK and you are not UK resident for tax purposes at that time, when you return to the UK, you will be able to bring back the savings you have at that time and pay no UK tax on them. Clearly, if you put the cash on deposit and earned interest after your return to the UK or invested in shares which produced dividends or in property which produced rental income, that income would be liable to UK tax. The capital you brought back would not.

There seems to be alot of negativity around the Generali Vision Fund. However, if you cashed it in now or waited until you were at breakeven, there would be no income of gains to be taxed and you would merely be bringing back capital you had built up before you returned to the UK and that would not be taxable in the UK.
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