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Sam, Accountant
Category: Tax
Satisfied Customers: 14195
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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Last year I filled a self assessment form in for the first

Customer Question

Last year I filled a self assessment form in for the first time as I have a property which I rent out, it was quite a simple process.
This time however I have had an offshore fund pay out after 20 years of paying in £200 a month. I started the investment fund (based in Guernsey) when I was working in the Middle East in 1994. I have received no income from them over the years so i assume if there was any it would have been reinvested. I have paid in a total of £48,000 and the final payout was £57,000.
Could you advise my tax liability, would it be a simple calculation of a capital gain of the difference between £48k and 57k and then would I be able to offset that with my capital gains allowance or is it a more complicated issue
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.

Thanks for your question

The tax position depends on the type of investment and what the pay out is deemed to be (I would expect it to be a chargeable event - so fall within the capital gains regime) is complex, as there are so many variables these days

But can I ask were you provided with a chargeable even certificate to cover the pay out or was this defined as interest paid out on the investment? If you are not sure then the investment company will be able to advise you - whether the pay out (in excess of the initial investment) is subjected to income tax or capital gains tax.

I can then advise further


Customer: replied 3 years ago.


I received the following from the investment company

Dear Mr Barnish

Further to my email of yesterday, our Technical team have advised that this policy commenced prior to 6th April 2000, therefore we report to the Inland Revenue based on proceeds and not gains.

However we as a company would only issue Chargeable Event Certificates if the proceeds of the policy were over the Inland Revenue reporting threshold of £68,740.00 and therefore in this case no certificate would be issued. However, there is a personal obligation on the client to report to the Inland Revenue and I confirm that there is a gain of £8,975.14 on this investment.

I trust this information is of assistance to you.
Expert:  Sam replied 3 years ago.
Hi David

Thanks for your response and the wonderful information

As it is a capital gain and its less than £11,000 then you have no tax liability arising and nothing to report to HMRC, as the first £11,000 of any gain is exempt.

So you just fill in the self assessment as you did the year before, with the rental income and any other taxable income

Do let me know if you have any follow up questions