Paragraph 5

United Kingdom

Any reference in this Schedule to the United Kingdom equivalent profits of an offshore fund for an account period is a reference to the amount which, on the assumptions in sub-paragraph (3) below, would be the total profits of the fund for that period on which, after allowing for any deductions available against those profits, corporation tax would be chargeable.

(2)

In this paragraph the expression “profits” does not include chargeable gains.

(F1F2 F32A)

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)

The assumptions referred to in sub-paragraph (1) above are—

(a)

that the offshore fund is a company which, in the account period in question, but not in any other account period, is resident in the United Kingdom; and

(b)

that the account period is an accounting period of that company; and

(c)

that any dividends or distributions which, by virtue of F4F5Chapter 2 or 3 of Part 9A of CTA 2009, should be left out of account in computing income for corporation tax purposes are nevertheless to be brought into account in that computation F6. . . F7; and

(d)

that the provisions of the Corporation Tax Acts relating to profits, gains or losses arising from a creditor relationship (within the meaning of F8Part 5 of CTA 2009) apply as if the offshore fund were an authorised unit trust;F9and

(e)

that the provisions of the Corporation Tax Acts relating to profits or losses arising from a derivative contract (within the meaning of F10Part 7 of CTA 2009) apply as if the offshore fund were an authorised unit trust.

(4)

Without prejudice to any deductions available apart from this sub-paragraph, the deductions referred to in sub-paragraph (1) above include—

(a)

a deduction equal to any amount which, by virtue of paragraph 1(6) above, is allowed as a deduction in determining the income of the fund for the account period in question; and

(b)

a deduction equal to any amount of tax (paid under the law of a territory outside the United Kingdom) which was taken into account as a deduction in determining the income of the fund for the account period in question but which, because it is referable to capital rather than income, does not fall to be taken into account by virtue of section 811.

(5)

For the avoidance of doubt it is hereby declared that, if any sums forming part of the offshore fund’s income for any period have been received by the fund without any deduction of or charge to tax F11and have been so received by virtue of F12section 1279 of CTA 2009F13or section 714 or 715 of ITTOIA 2005, the effect of the assumption in sub-paragraph (3)(a) above is that those sums are to be brought into account in determining the total profits referred to in sub-paragraph (1) above.

Annotations

Textual amendments

F1: Sch. 27 para. 5(2A) inserted (27.7.1993) by Finance Act 1993 (c. 34), s. 170, Sch. 18 para.6
F2: Sch. 27 para. 5(2A) substituted (3.5.1994) by Finance Act 1994 (c. 9), s. 176(2)
F3: Sch. 27 para. 5(2A) repealed (with effect in accordance with Sch. 40 Pt. 3(10) Note, Sch. 40 Pt. 3(13) Note of the repealing Act) by Finance Act 2002 (c. 23), Sch. 40 Pt. 3(10), Sch. 40 Pt. 3(13)
F4: Words in Sch. 27 para. 5(3)(c) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 289(6)(a) (with Sch. 2 Pts. 1, 2)
F5: Words in Sch. 27 para. 5(3)(c) substituted (with effect in accordance with Sch. 14 para. 31 of the amending Act) by Finance Act 2009 (c. 10), Sch. 14 para. 13(a)
F6: Words in Sch. 27 para. 5(3)(c) omitted (with effect in accordance with Sch. 14 para. 31 of the repealing Act) by virtue of Finance Act 2009 (c. 10), Sch. 14 para. 13(b)
F7: Sch. 27 para. 5(3)(d) and preceding word inserted (with effect in accordance with s. 145(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 26 para. 1(1) (with Sch. 26 paras. 1(3)-(6), 17)
F8: Words in Sch. 27 para. 5(3)(d) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 289(6)(b) (with Sch. 2 Pts. 1, 2)
F9: Sch. 27 para. 5(3)(e) and preceding word inserted (with effect in accordance with s. 145(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 26 para. 1(1) (with Sch. 26 paras. 2(3)-(6), 17)
F10: Words in Sch. 27 para. 5(3)(e) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 289(6)(c) (with Sch. 2 Pts. 1, 2)
F11: Words in Sch. 27 para. 5(5) substituted (with effect in accordance with s. 154(9) of the amending Act) by Finance Act 1996 (c. 8), Sch. 28 para. 6
F12: Words in Sch. 27 para. 5(5) substituted (1.4.2009 with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), Sch. 1 para. 289(7) (with Sch. 2 Pts. 1, 2)
F13: Words in Sch. 27 para. 5(5) inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 350(4) (with Sch. 2)

Modifications

C1: Sch. 27 para. 5(1) modified (with effect in accordance with s. 105(1) of the modifying Act) by Finance Act 1996 (c. 8), Sch. 10 para. 3 (with Sch. 15) (and as that para. 3 is substituted (with effect in accordance with s. 82(2) of the 2002 amending Act) by Finance Act 2002 (c. 23), Sch. 25 para. 39)
C2: Sch. 27 para. 5(1) modified (with effect in accordance with s. 83(3) of the modifying Act) by Finance Act 2002 (c. 23), Sch. 26 para. 35 (with Sch. 28)

Notes on Schedule 27

Textual amendments

F1: Sch. 27 repealed (1.12.2009 with effect in accordance with reg. 1(2) of the repealing S.I.) by The Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001), regs. 1(1), 13(2)(3), Sch. 2 (with saving in Sch. 1 para. 3(4)) (subject, as saved, to modification by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 9 para. 24)