Offshore funds – draft legislation
New draft amendments to The Offshore Funds (Tax) Regulations 2009 have been published. The draft amendments are in addition to draft amendments published late last year relating to offshore funds that operate equalisation arrangements.
The new amendments relate to the following:
- Adjustments to the calculation of reported income per unit where funds do not operate equalisation
- An amendment for offshore funds similar to UK qualified investor schemes considered to be ‘equivalent to UK authorised investment funds’.
- Alterations to the Genuine Diversity of Ownership rule.
- New rules for calculating the reportable income of a transparent reporting fund.
- A provision to give more certainty to the computation of reportable income in an index tracking fund.
- Time limits for application and withdrawal extended.
- Clarification of scope of reporting requirements (to ‘relevant’ investors).
All Offshore Funds
- Where non-reporting funds are invested almost entirely in unlisted trading companies and gains arise on the disposal of such non-reporting funds then there is an exception to the charge to tax on an offshore income gain.
- Fiscally transparent funds will be outside the scope of legislation which treats holdings in certain funds as loan relationships (for corporate investors).
Comments on the draft legislation should be sent to:
HM Revenue & Customs
Financial Products and Services
100 Parliament Street