The Offshore Funds (Tax) Regulations 2009
PART 1INTRODUCTION
Preliminary provisions
1Citation, commencement and effect
2Structure of these Regulations
General provisions
3Definition of “offshore fund”
4Classification of offshore funds
Treatment of umbrella arrangements and of funds comprising more than one class of interest
5Treatment of umbrella arrangements
6Treatment of funds comprising more than one class of interest
Interpretation
7Meaning of “participant”
8Meaning of “interest” (of a participant in an offshore fund)
9Meaning of “guaranteed return fund”
10Meaning of “market value”
11Meaning of “transparent fund”
12General interpretation
Transitional provisions etc.
13Transitional provisions and savings, repeals, abbreviations and general index
PART 2THE TREATMENT OF PARTICIPANTS IN NON-REPORTING FUNDS
CHAPTER 1PRELIMINARY PROVISIONS
14Structure of this Part
15Meaning of “material disposal”
CHAPTER 2CHARGES TO TAX ON PARTICIPANTS IN NON-REPORTING FUNDS
Charge to tax on certain amounts treated as distributions
16Treatment of certain amounts as distributions
Charge to tax on disposal of asset
17The charge to tax
18The charge to tax: further provisions
19Income treated as arising under regulation 17: remittance basis
Offshore funds and gains of non-resident settlements
20Application to gains of non-resident settlements
Offshore funds and the transfer of assets abroad
21Application of transfer of assets abroad provisions
Application of TCGA 1992
22Application of certain provisions of TCGA 1992
23Application of section 10A of TCGA 1992
24Application of section 13 of TCGA 1992
CHAPTER 3EXCEPTIONS ETC. FROM THE CHARGE TO TAX
25Exceptions from the charge
26Trading stock etc.
27Long-term insurance funds of insurance companies
28Loans other than participating loans
29Interests in transparent funds
30Rights in certain existing holdings
31Charitable companies and charitable trusts
CHAPTER 4DISPOSALS OF INTERESTS IN NON-REPORTING FUNDS
Basic provisions
32Application of this Chapter
33Disposal of an asset: the basic rule
Further provisions
34Provisions applicable on death
35Application of section 135 of TCGA 1992
36Application of section 136 of TCGA 1992
37Exchange of interests of different classes
CHAPTER 5OFFSHORE INCOME GAINS AND THE COMPUTATION OF OFFSHORE INCOME GAINS
38General provisions
39The basic gain and its computation
40Earlier disposal to which the no gain/no loss basis applies
41Modifications of TCGA 1992
42Losses
43Special rules for certain existing holdings
CHAPTER 6DEDUCTION OF OFFSHORE INCOME GAINS IN COMPUTING CHARGEABLE GAINS
44Ambit of this Chapter
45Treatment of the TCGA disposal: general rules
46Modification of section 162 of TCGA 1992
47Application of section 128 of TCGA 1992
CHAPTER 7THE CONVERSION OF A NON-REPORTING FUND INTO A REPORTING FUND
48Consequences of conversion for participants
PART 3REPORTING FUNDS AND THE TREATMENT OF PARTICIPANTS IN REPORTING FUNDS
CHAPTER 1PRELIMINARY PROVISIONS
49Structure of this Part
50Meaning of “reporting fund”
CHAPTER 2ENTRY INTO THE REPORTING FUND REGIME
Applications for this Part to apply
51Who may make an application
52Conversion of non-reporting fund into reporting fund
53Contents of an application
54Form, timing and withdrawal of application
Procedure on applications
55Response by HMRC to application
56Appeal against rejection of application
CHAPTER 3THE GENERAL DUTIES OF REPORTING FUNDS
57Effects of entry into the reporting fund regime
58General duties of reporting funds
CHAPTER 4THE PREPARATION OF ACCOUNTS
59Accounts to be prepared in accordance with acceptable accounting policy
60Change in accounting policy
61Change in accounting practice to a generally accepted accounting practice
CHAPTER 5THE COMPUTATION OF REPORTABLE INCOME
General
62Duty to provide computation
63Computation of reportable income: general
Adjustments for capital items
64Treatment of capital items following IMA SORP
65Treatment of other capital items
Adjustments for special classes of income
66Effective interest income or comparable amounts
67Income from wholly-owned subsidiaries
68Income from other reporting funds
69Income from non-reporting funds: first case
70Income from non-reporting funds: second case
71Income from non-reporting funds if first case ceases to apply
Adjustments for equalisation arrangements
72Treatment of reporting funds operating equalisation arrangements
CHAPTER 6TRANSACTIONS BY CERTAIN REPORTING FUNDS WHICH ARE NOT TREATED AS TRADING
Conditions to be met by reporting funds for this Chapter to apply
73Introductory
74The equivalence condition
75The genuine diversity of ownership condition
76The genuine diversity of ownership condition: further provisions
Clearances in relation to the equivalence and genuine diversity of ownership conditions
77Who may apply for clearance
78Procedure for obtaining clearance
79Circumstances in which clearance may not be relied upon
Investment transactions carried out by diversely owned funds
80Treatment of investment transactions carried out by diversely owned funds
81Meaning of “investment transaction”
82Meaning of “relevant contract”: general
83Meaning of “relevant contract”: options
84Meaning of “relevant contract”: futures
85Options and futures: further provisions
86Meaning of “relevant contract”: contracts for differences
87Interpretation of regulation 81(c)
88Meaning of “units in a collective investment scheme”
89Meaning of “transaction in a carbon emission trading product”
CHAPTER 7REPORTS TO PARTICIPANTS
90Report to participants for a reporting period
91Meaning of “reporting period”
92Contents of report to participants
93Lengthy periods of account where full information not available
CHAPTER 8THE TAX TREATMENT OF PARTICIPANTS IN REPORTING FUNDS
Tax treatment of the reported income of the fund in the hands of participants
94Reported income: general provisions
95Participants chargeable to income tax: corporate funds
96Participants chargeable to income tax: other non-transparent funds
97Participants chargeable to income tax: transparent funds
98Participants chargeable to corporation tax
Disposals and deemed disposals of interests
99Disposals of interests
100Deemed disposals of interests
Charitable companies and charitable trusts
101Special provisions applying to charitable companies and charitable trusts
Anti-avoidance provisions
102Treatment of financial traders if conditions specified in regulation 73 are met
103Amounts brought into account in computing trading profits or losses of financial traders
104Interests not within regulation 103
105Meaning of “financial trader”
CHAPTER 9THE PROVISION OF INFORMATION TO HMRC
106Reporting requirements
107Information obligations of reporting funds
CHAPTER 10BREACHES OF REPORTING FUND REQUIREMENTS
108Types of breaches
109Consequences of minor breaches
110Differences between reported income and reportable income
111Provision of report that is incorrect or incomplete
112Cases where information is not provided
113Serious breaches
114Consequences of serious breaches
115Appeal against exclusion from the reporting fund regime
CHAPTER 11LEAVING THE REPORTING FUND REGIME
116Termination by notice given by reporting fund
117Reporting fund not complying with requirements
CHAPTER 12CONSTANT NAV FUNDS
Interpretation
118Meaning of “constant NAV fund”
Modified application of this Part
119General
120Modified application of Chapter 2
121Modified application of Chapter 3
122Disapplication of Chapters 4 to 9
123Modified application of Chapter 10
124Disapplication of Chapter 11
PART 4CONSEQUENTIAL AMENDMENTS
125Amendment of the Inheritance Tax Act 1984
126Amendment of ICTA
127Amendment of TCGA 1992
128Amendment of ITTOIA 2005
129Amendment of ITA 2007
130Amendment of FA 2008
131Amendment of CTA 2009
SCHEDULE 1Transitional Provisions and Savings
1In this Schedule— “distributing fund” means a fund which, immediately...
2(1) This paragraph applies in the case of an existing...
3(1) This paragraph applies in the case of an existing...
4(1) This paragraph applies in the case of an existing...
5(1) This paragraph applies in the case of an existing...
6(1) This paragraph applies in the case of an existing...
7(1) This paragraph applies in the case of an arrangement...
SCHEDULE 2Repeals
SCHEDULE 3Abbreviations and Defined Expressions
PART 1Abbreviations of Acts
PART 2Index of expressions defined or otherwise explained in these Regulations
2009 No. 3001
Income Tax
Corporation Tax
Capital Gains Tax

The Offshore Funds (Tax) Regulations 2009

Made
Coming into force
The Treasury make the following Regulations in exercise of the powers conferred by sections 41(1) and 42 of the Finance Act 20081.
In accordance with section 42A(2)(c) of that Act2, a draft of this instrument was laid before the House of Commons and approved by a resolution of that House.