Capital gains tax on Indian Mutual Fund

Dear Sirs, I had a mutual fund which matured in 2022. The £8000, maturity value from the disposal was placed in a non resident Indian bank account in India where it still sits. The bank has emailed me to provide a self declaration under the Indian Income Tax Act, FATCA/CRS otherwise I will be liable for any charges that are levied on them by the government. I wasn't intending to submit a tax return as I am PAYE and the amount of £8000 falls within the CGTA for 2022/23. I am unsure what I need to provide to my Indian bank to satisfy them that I have declared this income. Your guidance would be greatly appreciated.

Hi
The  interest that arises from your mutual fund maturing, is taxable in the UK, as foreign income, not foreign capital gains.  
As it is foreign income, it must be declared, in pounds sterling in a self assessment tax return on SA106.

Thank you Admin 10, Forgive my ignorance but are you saying a mutual fund maturing is based upon an interest rate? My understanding is that it is invested in a fund which can increase or decrease and thus I believed it was CGT. My father purchased the fund in my name for me as a present.

Hi,

The main effect for UK investors who have invested in non-reporting funds, as opposed to reporting funds, is that on disposal of their interests they will be liable to tax on any gain arising as if it were income (that is, an offshore income gain, or ‘OIG’) instead of as a capital gain.

There are certain exceptions to this, please see IFM13400 onwards. 

IFM13400 - Offshore Funds: participants in offshore funds: the charge to tax on disposal of an interest in a non-reporting fund

Thank you.

Further to HMRC Admin 32's response, can you please advise where in the SA106 self assessment section I should enter the FTCR related to gains on disposal of non-reporting funds. As far as I can tell, there is no box on that "Other overseas income and gains" page.

Hi,
Non reporting funds are treated as 'offshore income gains' and are subject to income tax and not Capital Gains Tax. The gains should be entered in box 41 of SA106 and in the box marked "Other overseas income and gains" on the online return. Any FTCR should be entered at box 2.
Thank you.

Hi HMRC Admin team, For gains on Non reporting funds which are treated as "OFFSHORE INCOME GAINS", can you confirm if Capital gains paid in India be claimed under dual taxation treaty? And which of the below calculation applies? Calculation 1: Mutual fund Gains of £10,000 CG Tax paid in India; £1250 Income tax for Mutual fund gains at 20%: £2,000 Income tax after allowing for CGT paid: £750 (can you confirm this?) Calculation 2: Income tax calculated on £8750 (gains after CGT)? Income tax for Mutual fund gains after CGT at 20%: £1750 Meaning total tax paid (including CGT): £3000 which would be 30% of Mutual fund gain

Hi, I have stocks invested in India but when I sell the stocks CGT is 25% which will be deducted directly before paid to me. Also I have to file income tax returns EOY for the earnings/losses in India. Also I shall be reinvesting the earnings again in Indian stocks. In this case whether I should be paying tax in UK on the net earnings? Thanks,

Hi kbp78,
We cannot comment on any form of calculation/example or scenario, whether fact or fiction. We can only point you the direction of the guidance, so that you can review the guidance and to allow you to make an informed decision. If, after that you still need advice, you need to employ the services of a financial adviser. 
Thank you.