Changes to offshore fund rules
The offshore funds legislation was introduced in December 2009 to make proper provision for the taxation of UK resident investors in offshore funds in respect of income tax, corporation tax and capital gains tax.
HMRC have now published a statement to address concerns that have been raised by the funds industry relating to equalisation and certain other issues in offshore funds.
The most immediate of these concerns relates to funds which operate equalisation on accumulation units. HMRC have said that they will issue draft legislative material by the end of 2010 showing how such funds should calculate reported income.
HMRC are also expected to tackle other concerns with the offshore funds legislation in early 2011 with a view to introducing a new statutory instrument in the springtime. As funds have six months in which to report, funds will have the option to report on periods already ended using the new equalisation rule when calculating reported income.