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Offshore income gains and the accrued income scheme.
KEY POINTS
- Offshore income gains rules result in accumulated income being subject to tax.
- Check stockbrokers’ year-end report for non-reporting funds and offshore income gains.
- Accrued income scheme applies to loan stock of any public body or company.
- Buyers and sellers have to adjust their taxable income to take into account interest.
In the past income tax rates were high but capital gains tax rates were relatively low. It became the holy grail of tax planning to convert income into capital but the government changed the tax rules to prevent this.
Offshore income gains
The offshore income gains rules were created to counter a surprisingly straightforward idea. An investment company or other entity (the fund) was...
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