I plan to sell an offshore investment fund soon. I understand that even though it is offshore, you are liable for CGT as soon as you convert it into cash. Is this true? If so, what if I converted to dollars and not pounds?
I am not trying to avoid tax, I just want to exit and then re-enter the fund later in the year.
Thanks.
Assuming you to be resident, ordinarily resident and domiciled in the UK, is it true? No!
You don't even need to convert it into any other currency. You would just need to base the CGT claculation upon the Sterling value of the sale proceeds.
For example, you sell an investment and the net sale proceeds are say
20000 euros. Even if you keep the proceeds in euros you would still be liable to CGT, the calculation taking into account the Sterling equivalent of 20000 euros at the time of sale.Okay, so I have to decide if it is worth cashing out before April 1st to get the CGT tax relief and then go back into the investment to do the real cash out later. I suppose you can't backdate CGT allowances?
What type of investment is it? It might be affected by the buy-back restrictions (I doubt offshore is a get out)?
no.
tim
The UK tax year ends on 5 April 2005 for individuals.
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