F1PART 6AFUNDS INVESTING IN NON-REPORTING OFFSHORE FUNDS

CHAPTER 6Income gains and computation of income gains

The basic gain and its computation85Z1.

(1)

In the case of a participant chargeable to income tax, the basic gain is a gain of the amount which would be the gain on that disposal for the purposes of TCGA 1992 if the gain were computed without regard to any charge to income tax arising under this Part.

(2)

In the case of a participant chargeable to corporation tax, the basic gain is a gain of the amount which would be the gain on that disposal for the purposes of TCGA 1992 if the gain were computed—

(a)

without regard to any charge to corporation tax arising under this Part, and

(b)

without regard to any indexation allowance on the disposal under TCGA 1992.

(3)

The computation of the basic gain is subject to—

(a)

regulation 85W (provisions applicable on death);

(b)

regulation 85X (application of section 135 of TCGA 1992);

(c)

regulation 85Y (application of section 136 of TCGA 1992);

(d)

regulation 85Z2 (earlier disposal to which the no gain/no loss basis applies);

(e)

regulation 85Z3 (modifications of TCGA 1992); and

(f)

regulation 85Z4 (losses).