10 - Indirect Investments (E & F) Flashcards
If you buy units in a unit trust, what are you buying in an OEIC?
Shares
Which are open and closed ended?
1. Unit trusts
2. OEICs
3. Investment trusts.
Open
Open
Closed
Are gains on the disposal of unit trusts and OEICs liable to CGT?
Yes
How is income from a UK collective non-equity unit trust, or OEIC that invest in fixed-interest securities taxed?
Savings income (and paid gross)
Any income that accrues to the fund is usually accumulated. Income is not taxed as it arises, only on disposal of units/shares. Which type of offshore fund does this refer to?
Non-reporting offshore fund
UK investors must be told of their share of the fund’s income when it arises so that they can include this on their self
assessment tax returns. There is no need for the fund to distribute any income. Which type of offshore fund does this refer to?
Reporting offshore fund
Can you use the personal savings allowance, the dividend
allowance and the starting rate for savings income against gains in an offshore reporting fund?
No
What is the tax treatment on gains from a non-reporting offshore fund, to a non-UK resident?
Free from UK gains and income tax but may be liable in own country still
If you are UK-resident but non-UK-domiciled, how can you ensure you escape UK tax liability on income and gains?
If you elect to be taxed on the remittance basis. However, you may have to pay the annual remittance basis tax charge of £30,000 - £60,000.
Dividends from which type of fund will usually be subject to a
non-reclaimable withholding tax?
Offshore fund investing in equities
Offshore fixed-interest funds are usually more tax efficient for resident?
UK
Ultimately, what is the perceived advantage of offshore funds?
The funds should grown faster in a low-tax environment
A UK investor will have to pay income tax on income even
if it is rolled up and not distributed. This is true for which type of offshore fund?
Reporting
