Income and Corporation Taxes Act 1988

3 (1) Sub-paragraph (2) below applies if any sums which form part of the income of an offshore fund falling within [F1 section 756A(1)(b) or (c)] are of such a nature that—

[F2 (a) the holders of interests in the fund who are individuals domiciled and resident in the United Kingdom—

(i) are chargeable to tax under a provision specified in section 830(2) of ITTOIA 2005 in respect of such of those sums as are referable to their interests; or

(ii) if any of that income is derived from assets within the United Kingdom, would be so chargeable had the assets been outside the United Kingdom;

(aa) the holders of interests in the fund which are companies resident in the United Kingdom—

(i) are chargeable to tax under Case III of Schedule D in respect of income arising from securities out of the United Kingdom or from possessions out of the United Kingdom;

(ii) are chargeable to tax under Case V of Schedule D; or

(iii) if any of that income is derived from assets within the United Kingdom, would have been chargeable under sub-paragraph (i) or (ii) had the assets been outside the United Kingdom; and]

(b) the holders of interests who are not such companies or individuals would be chargeable as mentioned in [F3 paragraph (a) or (aa)] above if they were resident in the United Kingdom or, in the case of individuals, if they were domiciled and both resident and ordinarily resident there.

(2) To the extent that sums falling within sub-paragraph (1) above do not actually form part of a distribution complying with paragraphs 1(1)(c) and (d) above, they shall be treated for the purposes of this Part of this Schedule—

(a) as a distribution complying with those paragraphs and made out of the income of which they form part; and

(b) as paid to the holders of the interests to which they are referable.

Textual Amendments

F1 Words in Sch. 27 para. 3(1) substituted (with effect in accordance with s. 145(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 26 para. 8(2) (with Sch. 26 para. 17)

F2 Sch. 27 para. 3(1)(a)(aa) substituted for para. 3(1)(a) (20.7.2005) by Finance (No. 2) Act 2005 (c. 22), s. 23(3)

F3 Words in Sch. 27 para. 3(1)(b) substituted (20.7.2005) by Finance (No. 2) Act 2005 (c. 22), s. 23(4)