Gains chargeable to IT on offshore non-reporting funds

Gains chargeable to IT on offshore funds

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Can someone tell me, is this a software issue or a failure in my understanding?

I am preparing the trust tax return for an IIP, plus R185 certs, and personal tax returns of beneficiaries

I have a consolidated tax voucher on an investment portfolio held by the IIP, which includes a figure for amounts described as "gains chargeable to Income Tax on offshore non-reporting funds".  The voucher helpfully tells me what box to enter it in on the trust tax return, which is to say box 9.38.  Note that this box is NOT in the foreign income supplementary pages.

Our trust tax software autopopulates the HMRC tax calculation working sheet and in the process levies a 45% tax charge on entries in this box (to the extent that they exceed the starting rate band).

Our personal tax software has an entry for UK income from trusts and settlements, in the same format as the R185 certificate.  For non-discretionary income it only allows entries for income taxed at the basic rate, savings rate or dividend rate.  It only allows you to enter the net income under each category and it autopopulates the tax and gross.  For 2015-16 the rates are 20%, 20% and 10% respectively.  No mention of 45% anywhere, and no option to override.

Should I be entering this in the foreign pages, which does allow me to enter a large amount of UK tax deducted, despite that it is not on the foreign page of the trust tax return?

With kind regards

Clint Westwood


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By Marion Hayes
14th Sep 2016 19:38

Hi Clint
This is an income tax charge on a capital gain so has no tax credit. Hence 45% charge.
More importantly it is not income and is not distributable to a life interest beneficiary so is not part of R185 information.
If this fund had produced any income that would go on the foreign pages.

Thanks (1)