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bigduckontax, Accountant
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Hello. I took out an offshore investment while I was living

Customer Question

Hello. I took out an offshore investment while I was living and tax resident in Dubai and cashed it in after returning to the UK. The nature of the investment was that it paid a bonus if a group of stock market indices all rose year on year (and nothing if not). It paid a bonus twice while I was still in Dubai and three times after repatriating. For my tax return do I report unearned income or a capital gain?
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question. In the tax year of your return HMRC should split the year into two portions, one non resident and one resident. When you originally left the UK you should have notified HMRC of your departure by means of a form P85. Fortunately you can do this at any time and on line into the bargain.
In my opinion the three bonus payments made once you returned to these shores are unearned income and should be so declared on SA100 [Annual Self Assessment Return form]. Any gain made on cashing in would be within the Capital Gains Tax regime.
Of course for income you have a personal allowance dependent on age. For the majority, those of working age, it is 10K. For capital gains you have an Annual Exempt Amount of 11K also. These sums can be used to reduce your exposure to the relevant tax.
I do hope I have shed some light on your situation.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3389
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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