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The Offshore Funds (Tax) Regulations 2009

Draft. This instrument was laid in draft and may differ from the one made. Look for the made version under its title.

Draft 2009, ISBN 9780111486313

Original text. legislation.gov.uk does not revise statutory instruments, so later amendments are not shown here. Changes made to it are listed under each provision when known.

Draft Regulations laid before the House of Commons under section 42A(2)(c) of the Finance Act 2008 (c. 9) for approval by resolution of that House. (Section 42A of the Finance Act 2008 was inserted by paragraph 5 of Schedule 22 to the Finance Act 2009 (c. 10).)

Income Tax

Corporation Tax

Capital Gains Tax

Made ***

Coming into force 1st December 2009

The Treasury make the following Regulations in exercise of the powers conferred by sections 41(1) and 42 of the Finance Act 2008f1.

In accordance with section 42A(2)(c) of that Actf2, a draft of this instrument was laid before the House of Commons and approved by a resolution of that House.

Annotations to the whole text

Footnotes

f1

2008 c. 9; section 42 was amended by paragraph 4 of Schedule 22 to the Finance Act 2009 (c. 10).

f2

Section 42A was inserted by paragraph 5 of Schedule 22 to the Finance Act 2009.

Contents

  1. Part 1: INTRODUCTION
  2. Preliminary provisions
  3. 1Citation, commencement and effect
  4. 2Structure of these Regulations
  5. General provisions
  6. 3Definition of “offshore fund”
  7. 4Classification of offshore funds
  8. Treatment of umbrella arrangements and of funds comprising more than one class of interest
  9. 5Treatment of umbrella arrangements
  10. 6Treatment of funds comprising more than one class of interest
  11. Interpretation
  12. 7Meaning of “participant”
  13. 8Meaning of “interest” (of a participant in an offshore fund)
  14. 9Meaning of “guaranteed return fund”
  15. 10Meaning of “market value”
  16. 11Meaning of “transparent fund”
  17. 12General interpretation
  18. Transitional provisions etc.
  19. 13Transitional provisions and savings, repeals, abbreviations and general index
  20. Part 2: THE TREATMENT OF PARTICIPANTS IN NON-REPORTING FUNDS
  21. Chapter 1: PRELIMINARY PROVISIONS
  22. 14Structure of this Part
  23. 15Meaning of “material disposal”
  24. Chapter 2: CHARGES TO TAX ON PARTICIPANTS IN NON-REPORTING FUNDS
  25. Charge to tax on certain amounts treated as distributions
  26. 16Treatment of certain amounts as distributions
  27. Charge to tax on disposal of asset
  28. 17The charge to tax
  29. 18The charge to tax: further provisions
  30. 19Income treated as arising under regulation 17: remittance basis
  31. Offshore funds and gains of non-resident settlements
  32. 20Application to gains of non-resident settlements
  33. Offshore funds and the transfer of assets abroad
  34. 21Application of transfer of assets abroad provisions
  35. Application of TCGA 1992
  36. 22Application of certain provisions of TCGA 1992
  37. 23Application of section 10A of TCGA 1992
  38. 24Application of section 13 of TCGA 1992
  39. Chapter 3: EXCEPTIONS ETC. FROM THE CHARGE TO TAX
  40. 25Exceptions from the charge
  41. 26Trading stock etc.
  42. 27Long-term insurance funds of insurance companies
  43. 28Loans other than participating loans
  44. 29Interests in transparent funds
  45. 30Rights in certain existing holdings
  46. 31Charitable companies and charitable trusts
  47. Chapter 4: DISPOSALS OF INTERESTS IN NON-REPORTING FUNDS
  48. Basic provisions
  49. 32Application of this Chapter
  50. 33Disposal of an asset: the basic rule
  51. Further provisions
  52. 34Provisions applicable on death
  53. 35Application of section 135 of TCGA 1992
  54. 36Application of section 136 of TCGA 1992
  55. 37Exchange of interests of different classes
  56. Chapter 5: OFFSHORE INCOME GAINS AND THE COMPUTATION OF OFFSHORE INCOME GAINS
  57. 38General provisions
  58. 39The basic gain and its computation
  59. 40Earlier disposal to which the no gain/no loss basis applies
  60. 41Modifications of TCGA 1992
  61. 42Losses
  62. 43Special rules for certain existing holdings
  63. Chapter 6: DEDUCTION OF OFFSHORE INCOME GAINS IN COMPUTING CHARGEABLE GAINS
  64. 44Ambit of this Chapter
  65. 45Treatment of the TCGA disposal: general rules
  66. 46Modification of section 162 of TCGA 1992
  67. 47Application of section 128 of TCGA 1992
  68. Chapter 7: THE CONVERSION OF A NON-REPORTING FUND INTO A REPORTING FUND
  69. 48Consequences of conversion for participants
  70. Part 3: REPORTING FUNDS AND THE TREATMENT OF PARTICIPANTS IN REPORTING FUNDS
  71. Chapter 1: PRELIMINARY PROVISIONS
  72. 49Structure of this Part
  73. 50Meaning of “reporting fund”
  74. Chapter 2: ENTRY INTO THE REPORTING FUND REGIME
  75. Applications for this Part to apply
  76. 51Who may make an application
  77. 52Conversion of non-reporting fund into reporting fund
  78. 53Contents of an application
  79. 54Form, timing and withdrawal of application
  80. Procedure on applications
  81. 55Response by HMRC to application
  82. 56Appeal against rejection of application
  83. Chapter 3: THE GENERAL DUTIES OF REPORTING FUNDS
  84. 57Effects of entry into the reporting fund regime
  85. 58General duties of reporting funds
  86. Chapter 4: THE PREPARATION OF ACCOUNTS
  87. 59Accounts to be prepared in accordance with acceptable accounting policy
  88. 60Change in accounting policy
  89. 61Change in accounting practice to a generally accepted accounting practice
  90. Chapter 5: THE COMPUTATION OF REPORTABLE INCOME
  91. General
  92. 62Duty to provide computation
  93. 63Computation of reportable income: general
  94. Adjustments for capital items
  95. 64Treatment of capital items following IMA SORP
  96. 65Treatment of other capital items
  97. Adjustments for special classes of income
  98. 66Effective interest income or comparable amounts
  99. 67Income from wholly-owned subsidiaries
  100. 68Income from other reporting funds
  101. 69Income from non-reporting funds: first case
  102. 70Income from non-reporting funds: second case
  103. 71Income from non-reporting funds if first case ceases to apply
  104. Adjustments for equalisation arrangements
  105. 72Treatment of reporting funds operating equalisation arrangements
  106. Chapter 6: TRANSACTIONS BY CERTAIN REPORTING FUNDS WHICH ARE NOT TREATED AS TRADING
  107. Conditions to be met by reporting funds for this Chapter to apply
  108. 73Introductory
  109. 74The equivalence condition
  110. 75The genuine diversity of ownership condition
  111. 76The genuine diversity of ownership condition: further provisions
  112. Clearances in relation to the equivalence and genuine diversity of ownership conditions
  113. 77Who may apply for clearance
  114. 78Procedure for obtaining clearance
  115. 79Circumstances in which clearance may not be relied upon
  116. Investment transactions carried out by diversely owned funds
  117. 80Treatment of investment transactions carried out by diversely owned funds
  118. 81Meaning of “investment transaction”
  119. 82Meaning of “relevant contract”: general
  120. 83Meaning of “relevant contract”: options
  121. 84Meaning of “relevant contract”: futures
  122. 85Options and futures: further provisions
  123. 86Meaning of “relevant contract”: contracts for differences
  124. 87Interpretation of regulation 81(c)
  125. 88Meaning of “units in a collective investment scheme”
  126. 89Meaning of “transaction in a carbon emission trading product”
  127. Chapter 7: REPORTS TO PARTICIPANTS
  128. 90Report to participants for a reporting period
  129. 91Meaning of “reporting period”
  130. 92Contents of report to participants
  131. 93Lengthy periods of account where full information not available
  132. Chapter 8: THE TAX TREATMENT OF PARTICIPANTS IN REPORTING FUNDS
  133. Tax treatment of the reported income of the fund in the hands of participants
  134. 94Reported income: general provisions
  135. 95Participants chargeable to income tax: corporate funds
  136. 96Participants chargeable to income tax: other non-transparent funds
  137. 97Participants chargeable to income tax: transparent funds
  138. 98Participants chargeable to corporation tax
  139. Disposals and deemed disposals of interests
  140. 99Disposals of interests
  141. 100Deemed disposals of interests
  142. Charitable companies and charitable trusts
  143. 101Special provisions applying to charitable companies and charitable trusts
  144. Anti-avoidance provisions
  145. 102Treatment of financial traders if conditions specified in regulation 73 are met
  146. 103Amounts brought into account in computing trading profits or losses of financial traders
  147. 104Interests not within regulation 103
  148. 105Meaning of “financial trader”
  149. Chapter 9: THE PROVISION OF INFORMATION TO HMRC
  150. 106Reporting requirements
  151. 107Information obligations of reporting funds
  152. Chapter 10: BREACHES OF REPORTING FUND REQUIREMENTS
  153. 108Types of breaches
  154. 109Consequences of minor breaches
  155. 110Differences between reported income and reportable income
  156. 111Provision of report that is incorrect or incomplete
  157. 112Cases where information is not provided
  158. 113Serious breaches
  159. 114Consequences of serious breaches
  160. 115Appeal against exclusion from the reporting fund regime
  161. Chapter 11: LEAVING THE REPORTING FUND REGIME
  162. 116Termination by notice given by reporting fund
  163. 117Reporting fund not complying with requirements
  164. Chapter 12: CONSTANT NAV FUNDS
  165. Interpretation
  166. 118Meaning of “constant NAV fund”
  167. Modified application of this Part
  168. 119General
  169. 120Modified application of Chapter 2
  170. 121Modified application of Chapter 3
  171. 122Disapplication of Chapters 4 to 9
  172. 123Modified application of Chapter 10
  173. 124Disapplication of Chapter 11
  174. Part 4: CONSEQUENTIAL AMENDMENTS
  175. 125Amendment of the Inheritance Tax Act 1984
  176. 126Amendment of ICTA
  177. 127Amendment of TCGA 1992
  178. 128Amendment of ITTOIA 2005
  179. 129Amendment of ITA 2007
  180. 130Amendment of FA 2008
  181. 131Amendment of CTA 2009
  182. Signature
  183. Schedule 1: Transitional Provisions and Savings
  184. 1Paragraph 1
  185. 2Paragraph 2
  186. 3Paragraph 3
  187. 4Paragraph 4
  188. 5Paragraph 5
  189. 6Paragraph 6
  190. 7Paragraph 7
  191. Schedule 2Repeals
  192. Schedule 3: Abbreviations and Defined Expressions
  193. 1Abbreviations of Acts
  194. 2Index of expressions defined or otherwise explained in these Regulations
  195. Explanatory note