leveraged investment bond and UK tax

Hello,

I would like a talk about investment bonds I used to hold.

I am UK tax resident, the offshore bond made a total gain of approx 180k, which HMRC want to tax me on.

i) At the outset in 2007, I put 450k of tax paid money into the bond.

ii) in 2008, the bond was further leveraged with a JPY currency loan (approx 200k GBP) from an offshore bank

iii) total invested (450 + 200 = 650k)

iv) at redemption in 2011, the bond was worth 830k an increase of 180k

v) the JPY had strengthened against GBP and 380k was taken by the offshore bank (who controlled the bond) to repay the JPY currency loan

vi) 450k was paid to me

vii) (380 + 450 = 830k) total redemption

As you can see the offshore bank have made a profit of 180k on the currency loan and I have received back approx what I had invested, the problem being HMRC are asking me to pay tax on the 180k gain approx 90k, but I have no profit from which to pay them.