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The Offshore Funds (Tax) Regulations 2009

S.I. 2009/3001 · Made 12 November 2009 · Extends to United Kingdom

Up to date with all changes known to legislation.gov.uk, revised to 6 April 2025.

Income Tax

Corporation Tax

Capital Gains Tax

Made 12th November 2009

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 2008 M1.

In accordance with section 42A(2)(c) of that Act M2, a draft of this instrument was laid before the House of Commons and approved by a resolution of that House.C1C2C3C4C5C6C7C8C9

Annotations to the whole text

Marginal citations

M1

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

M2

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

Modifications

C1

Regulations applied (with modifications) by Taxation of Chargeable Gains Act 1992 (c. 12), Sch. 5AAA para. 7(5) (as inserted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 21)

C2

Regulations applied (with modifications) by Taxation of Chargeable Gains Act 1992 (c. 12), Sch. 5AAA para. 13(3) (as inserted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 21)

C3

Regulations applied (with modifications) by Taxation of Chargeable Gains Act 1992 (c. 12), Sch. 5AAA para. 46(4) (as inserted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 21)

C4

Regulations modified (11.7.2023) by 2022 c. 3, Sch. 2 para. 9(3)(za) (as inserted by Finance (No. 2) Act 2023 (c. 30), Sch. 4 para. 12(3)(a))

C5

Regulations modified (11.7.2023) by 2010 c. 4, s. 528ZB(2A) (as inserted by Finance (No. 2) Act 2023 (c. 30), Sch. 4 para. 5(3))

C6

Regulations modified (11.7.2023) by 1992 c. 12, Sch. 5AAA para. 7(5A) (as inserted by Finance (No. 2) Act 2023 (c. 30), Sch. 4 para. 1(2)(b))

C7

Regulations modified (11.7.2023) by 1992 c. 12, Sch. 5AAA para. 46(4A) (as inserted by Finance (No. 2) Act 2023 (c. 30), Sch. 4 para. 1(4)(b))

C8

Regulations modified (11.7.2023) by 1992 c. 12, Sch. 5AAA para. 13(3A) (as inserted by Finance (No. 2) Act 2023 (c. 30), Sch. 4 para. 1(3)(b))

C9

Regulations modified (19.3.2025) by The Co-ownership Contractual Schemes (Tax) Regulations 2025 (S.I. 2025/200), regs. 1(2), 7(4) (with reg. 63)

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. 23Temporary non-residents
  38. 23ARegulation 23: supplementary
  39. 24Application of section 13 of TCGA 1992
  40. Chapter 3: EXCEPTIONS ETC. FROM THE CHARGE TO TAX
  41. 25Exceptions from the charge
  42. 26Trading stock etc.
  43. 27Long-term insurance funds of insurance companies
  44. 28Loans other than participating loans
  45. 29Interests in transparent funds
  46. 30Rights in certain existing holdings
  47. 31Charitable companies and charitable trusts
  48. 31AUnlisted trading company exception
  49. 31BUnlisted trading company exception: the investment condition
  50. 31CUnlisted trading company exception: further provision
  51. Chapter 4: DISPOSALS OF INTERESTS IN NON-REPORTING FUNDS
  52. Basic provisions
  53. 32Application of this Chapter
  54. 33Disposal of an asset: the basic rule
  55. Further provisions
  56. 34Provisions applicable on death
  57. 36AExchanges and schemes of reconstruction
  58. 37Exchange of interests of different classes
  59. Chapter 5: OFFSHORE INCOME GAINS AND THE COMPUTATION OF OFFSHORE INCOME GAINS
  60. 38General provisions
  61. 39The basic gain and its computation
  62. 40Earlier disposal to which the no gain/no loss basis applies
  63. 41Modifications of TCGA 1992
  64. 42Losses
  65. 43Special rules for certain existing holdings
  66. Chapter 6: DEDUCTION OF OFFSHORE INCOME GAINS IN COMPUTING CHARGEABLE GAINS
  67. 44Ambit of this Chapter
  68. 45Treatment of the TCGA disposal: general rules
  69. 46Modification of section 162 of TCGA 1992
  70. 47Application of section 128 of TCGA 1992
  71. Chapter 7: THE CONVERSION OF A NON-REPORTING FUND INTO A REPORTING FUND
  72. 48Consequences of conversion for participants
  73. Part 3: REPORTING FUNDS AND THE TREATMENT OF PARTICIPANTS IN REPORTING FUNDS
  74. Chapter 1: PRELIMINARY PROVISIONS
  75. 49Structure and application of this Part
  76. 50Meaning of “reporting fund”
  77. 50AMeaning of “equalisation arrangements”, “full equalisation arrangements” and “equalisation amount”
  78. Chapter 2: ENTRY INTO THE REPORTING FUND REGIME
  79. Applications for this Part to apply
  80. 51Who may make an application
  81. 52Conversion of non-reporting fund into reporting fund
  82. 53Contents of an application
  83. 54Form, timing and withdrawal of application
  84. Procedure on applications
  85. 55Response by HMRC to application
  86. 56Appeal against rejection of application
  87. Chapter 2A: AMENDMENT TO APPLICATION FOR THIS PART TO APPLY
  88. 56AAmending a statement relating to equalisation
  89. 56BAppeal against refusal of application to amend a statement
  90. Chapter 3: THE GENERAL DUTIES OF REPORTING FUNDS
  91. 57Effects of entry into the reporting fund regime
  92. 58General duties of reporting funds
  93. Chapter 4: THE PREPARATION OF ACCOUNTS
  94. 59Accounts to be prepared in accordance with acceptable accounting policy
  95. 60Change in accounting policy
  96. 61Change in accounting practice to a generally accepted accounting practice
  97. Chapter 5: THE COMPUTATION OF REPORTABLE INCOME
  98. General
  99. 62Duty to provide computation
  100. 63Computation of reportable income: general
  101. Adjustments for capital items and miscellaneous items
  102. 64Treatment of capital items following IMA SORP
  103. 65Treatment of other capital items and miscellaneous items
  104. Adjustments for special classes of income
  105. 66Effective interest income or comparable amounts
  106. 67Income from wholly-owned subsidiaries
  107. 68Income from other reporting funds
  108. 68AIndex tracking funds
  109. 69Income from non-reporting funds: first case
  110. 70Income from non-reporting funds: second case
  111. 71Income from non-reporting funds if first case ceases to apply
  112. Adjustments for equalisation arrangements
  113. 72Treatment of reporting funds operating equalisation arrangements
  114. Adjustments where funds do not operate equalisation arrangements
  115. 72AReporting Funds not operating equalisation: income adjustments based on reportable income for computation periods
  116. 72BReporting Funds not operating equalisation: income adjustments based on accounting income for computation periods
  117. 72CSupplementary provisions: average number of units and computation period
  118. Chapter 6: TRANSACTIONS BY CERTAIN REPORTING FUNDS WHICH ARE NOT TREATED AS TRADING
  119. Conditions to be met by reporting funds for this Chapter to apply
  120. 73Introductory
  121. 74The equivalence condition
  122. 75The genuine diversity of ownership condition
  123. 76The genuine diversity of ownership condition: further provisions
  124. Clearances in relation to the equivalence and genuine diversity of ownership conditions
  125. 77Who may apply for clearance
  126. 78Procedure for obtaining clearance
  127. 79Circumstances in which clearance may not be relied upon
  128. Investment transactions carried out by diversely owned funds
  129. 80Treatment of investment transactions carried out by diversely owned funds
  130. 81Meaning of “investment transaction” Repealed
  131. 82Meaning of “relevant contract”: general Repealed
  132. 83Meaning of “relevant contract”: options Repealed
  133. 84Meaning of “relevant contract”: futures Repealed
  134. 85Options and futures: further provisions Repealed
  135. 86Meaning of “relevant contract”: contracts for differences Repealed
  136. 87Interpretation of regulation 81(c) Repealed
  137. 88Meaning of “units in a collective investment scheme” Repealed
  138. 89Meaning of “transaction in a carbon emission trading product” Repealed
  139. Chapter 6A: TRANSPARENT REPORTING FUNDS
  140. 89ATransparent reporting funds
  141. 89BReportable income: general
  142. 89CAdjustment in relation to income from other reporting funds
  143. 89DAdjustment in relation to income from non-reporting funds: first case
  144. 89EAdjustment in relation to income from non-reporting funds: second case
  145. Chapter 7: REPORTS TO PARTICIPANTS
  146. 90Report to participants for a reporting period
  147. 91Meaning of “reporting period”
  148. 92Contents of report to participants: non-transparent funds
  149. 92AFunds which do not operate equalisation arrangements: income adjustments on the basis of reported income Repealed
  150. 92BFunds which do not operate equalisation arrangements: income adjustments on the basis of accounting income Repealed
  151. 92CFunds which do not operate equalisation arrangements: computation period Repealed
  152. 92DContents of reports to participants: transparent reporting funds
  153. 93Lengthy periods of account where full information not available
  154. Chapter 8: THE TAX TREATMENT OF PARTICIPANTS IN REPORTING FUNDS
  155. Tax treatment of the reported income of the fund in the hands of participants
  156. 94Reported income: general provisions
  157. 94AEqualisation amounts not treated as distributions
  158. 95Participants chargeable to income tax: corporate funds
  159. 96Participants chargeable to income tax: other non-transparent funds
  160. 97Participants chargeable to income tax: transparent funds
  161. 98Participants chargeable to corporation tax
  162. Disposals and deemed disposals of interests
  163. 99Disposals of interests
  164. 100Deemed disposals of interests
  165. Charitable companies and charitable trusts
  166. 101Special provisions applying to charitable companies and charitable trusts
  167. Anti-avoidance provisions
  168. 102Treatment of financial traders if conditions specified in regulation 73 are met
  169. 103Amounts brought into account in computing trading profits or losses of financial traders
  170. 104Interests not within regulation 103
  171. 105Meaning of “financial trader”
  172. Chapter 9: THE PROVISION OF INFORMATION TO HMRC
  173. 106Reporting requirements
  174. 107Information obligations of reporting funds
  175. Chapter 10: BREACHES OF REPORTING FUND REQUIREMENTS
  176. 108Types of breaches
  177. 109Consequences of minor breaches
  178. 110Differences between reported income and reportable income
  179. 111Provision of report that is incorrect or incomplete
  180. 112Cases where information is not provided
  181. 113Serious breaches
  182. 114Consequences of serious breaches
  183. 115Appeal against exclusion from the reporting fund regime
  184. Chapter 11: LEAVING THE REPORTING FUND REGIME
  185. 116Termination by notice given by reporting fund
  186. 117Reporting fund not complying with requirements
  187. Chapter 12: CONSTANT NAV FUNDS
  188. Interpretation
  189. 118Meaning of “constant NAV fund”
  190. Modified application of this Part
  191. 119General
  192. 120Modified application of Chapter 2
  193. 121Modified application of Chapter 3
  194. 122Disapplication of Chapters 4 to 9
  195. 123Modified application of Chapter 10
  196. 124Disapplication of Chapter 11
  197. Part 3A: ANNUAL PAYMENTS TO NON-RESIDENTS
  198. 124AAnnual Payments – duty to deduct income tax
  199. 124BConsequences of reasonable but incorrect belief
  200. Part 4: CONSEQUENTIAL AMENDMENTS
  201. 125Amendment of the Inheritance Tax Act 1984
  202. 126Amendment of ICTA
  203. 127Amendment of TCGA 1992
  204. 128Amendment of ITTOIA 2005
  205. 129Amendment of ITA 2007
  206. 130Amendment of FA 2008 Repealed
  207. 131Amendment of CTA 2009
  208. Signature
  209. Schedule 1: Transitional Provisions and Savings
  210. 1Paragraph 1
  211. 2Paragraph 2
  212. 3Paragraph 3
  213. 3AParagraph 3A
  214. 3BParagraph 3B
  215. 3CParagraph 3C
  216. 4Paragraph 4
  217. 5Paragraph 5
  218. 6Paragraph 6
  219. 7Paragraph 7
  220. Schedule 2Repeals
  221. Schedule 3: Abbreviations and Defined Expressions
  222. 1Abbreviations of Acts
  223. 2Index of expressions defined or otherwise explained in these Regulations
  224. Explanatory note