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The Offshore Funds (Tax) Regulations 2009

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  1. Introductory Text

  2. PART 1 INTRODUCTION

    1. Preliminary provisions

      1. 1.Citation, commencement and effect

      2. 2.Structure of these Regulations

    2. General provisions

      1. 3.Definition of “offshore fund”

      2. 4.Classification of offshore funds

    3. Treatment of umbrella arrangements and of funds comprising more than one class of interest

      1. 5.Treatment of umbrella arrangements

      2. 6.Treatment of funds comprising more than one class of interest

    4. Interpretation

      1. 7.Meaning of “participant”

      2. 8.Meaning of “interest” (of a participant in an offshore fund)

      3. 9.Meaning of “guaranteed return fund”

      4. 10.Meaning of “market value”

      5. 11.Meaning of “transparent fund”

      6. 12.General interpretation

    5. Transitional provisions etc.

      1. 13.Transitional provisions and savings, repeals, abbreviations and general index

  3. PART 2 THE TREATMENT OF PARTICIPANTS IN NON-REPORTING FUNDS

    1. CHAPTER 1 PRELIMINARY PROVISIONS

      1. 14.Structure of this Part

      2. 15.Meaning of “material disposal”

    2. CHAPTER 2 CHARGES TO TAX ON PARTICIPANTS IN NON-REPORTING FUNDS

      1. Charge to tax on certain amounts treated as distributions

        1. 16.Treatment of certain amounts as distributions

      2. Charge to tax on disposal of asset

        1. 17.The charge to tax

        2. 18.The charge to tax: further provisions

        3. 19.Income treated as arising under regulation 17: remittance basis

      3. Offshore funds and gains of non-resident settlements

        1. 20.Application to gains of non-resident settlements

      4. Offshore funds and the transfer of assets abroad

        1. 21.Application of transfer of assets abroad provisions

      5. Application of TCGA 1992

        1. 22.Application of certain provisions of TCGA 1992

        2. 23.Application of section 10A of TCGA 1992

        3. 24.Application of section 13 of TCGA 1992

    3. CHAPTER 3 EXCEPTIONS ETC. FROM THE CHARGE TO TAX

      1. 25.Exceptions from the charge

      2. 26.Trading stock etc.

      3. 27.Long-term insurance funds of insurance companies

      4. 28.Loans other than participating loans

      5. 29.Interests in transparent funds

      6. 30.Rights in certain existing holdings

      7. 31.Charitable companies and charitable trusts

      8. 31A.Unlisted trading company exception

      9. 31B.Unlisted trading company exception: the investment condition

      10. 31C.Unlisted trading company exception: further provision

    4. CHAPTER 4 DISPOSALS OF INTERESTS IN NON-REPORTING FUNDS

      1. Basic provisions

        1. 32.Application of this Chapter

        2. 33.Disposal of an asset: the basic rule

      2. Further provisions

        1. 34.Provisions applicable on death

        2. 36A.Exchanges and schemes of reconstruction

        3. 37.Exchange of interests of different classes

    5. CHAPTER 5 OFFSHORE INCOME GAINS AND THE COMPUTATION OF OFFSHORE INCOME GAINS

      1. 38.General provisions

      2. 39.The basic gain and its computation

      3. 40.Earlier disposal to which the no gain/no loss basis applies

      4. 41.Modifications of TCGA 1992

      5. 42.Losses

      6. 43.Special rules for certain existing holdings

    6. CHAPTER 6 DEDUCTION OF OFFSHORE INCOME GAINS IN COMPUTING CHARGEABLE GAINS

      1. 44.Ambit of this Chapter

      2. 45.Treatment of the TCGA disposal: general rules

      3. 46.Modification of section 162 of TCGA 1992

      4. 47.Application of section 128 of TCGA 1992

    7. CHAPTER 7 THE CONVERSION OF A NON-REPORTING FUND INTO A REPORTING FUND

      1. 48.Consequences of conversion for participants

  4. PART 3 REPORTING FUNDS AND THE TREATMENT OF PARTICIPANTS IN REPORTING FUNDS

    1. CHAPTER 1 PRELIMINARY PROVISIONS

      1. 49.Structure and application of this Part

      2. 50.Meaning of “reporting fund”

      3. 50A.Meaning of “equalisation arrangements”, “full equalisation arrangements” and “equalisation amount”

    2. CHAPTER 2 ENTRY INTO THE REPORTING FUND REGIME

      1. Applications for this Part to apply

        1. 51.Who may make an application

        2. 52.Conversion of non-reporting fund into reporting fund

        3. 53.Contents of an application

        4. 54.Form, timing and withdrawal of application

      2. Procedure on applications

        1. 55.Response by HMRC to application

        2. 56.Appeal against rejection of application

    3. CHAPTER 2A AMENDMENT TO APPLICATION FOR THIS PART TO APPLY

      1. 56A.Amending a statement relating to equalisation

      2. 56B.Appeal against refusal of application to amend a statement

    4. CHAPTER 3 THE GENERAL DUTIES OF REPORTING FUNDS

      1. 57.Effects of entry into the reporting fund regime

      2. 58.General duties of reporting funds

    5. CHAPTER 4 THE PREPARATION OF ACCOUNTS

      1. 59.Accounts to be prepared in accordance with acceptable accounting policy

      2. 60.Change in accounting policy

      3. 61.Change in accounting practice to a generally accepted accounting practice

    6. CHAPTER 5 THE COMPUTATION OF REPORTABLE INCOME

      1. General

        1. 62.Duty to provide computation

        2. 63.Computation of reportable income: general

      2. Adjustments for capital items

        1. 64.Treatment of capital items following IMA SORP

        2. 65.Treatment of other capital items

      3. Adjustments for special classes of income

        1. 66.Effective interest income or comparable amounts

        2. 67.Income from wholly-owned subsidiaries

        3. 68.Income from other reporting funds

        4. 68A.Index tracking funds

        5. 69.Income from non-reporting funds: first case

        6. 70.Income from non-reporting funds: second case

        7. 71.Income from non-reporting funds if first case ceases to apply

      4. Adjustments for equalisation arrangements

        1. 72.Treatment of reporting funds operating equalisation arrangements

      5. Adjustments where funds do not operate equalisation arrangements

        1. 72A.Reporting Funds not operating equalisation: income adjustments based on reportable income for computation periods

        2. 72B.Reporting Funds not operating equalisation: income adjustments based on accounting income for computation periods

        3. 72C.Supplementary provisions: average number of units and computation period

    7. CHAPTER 6 TRANSACTIONS BY CERTAIN REPORTING FUNDS WHICH ARE NOT TREATED AS TRADING

      1. Conditions to be met by reporting funds for this Chapter to apply

        1. 73.Introductory

        2. 74.The equivalence condition

        3. 75.The genuine diversity of ownership condition

        4. 76.The genuine diversity of ownership condition: further provisions

      2. Clearances in relation to the equivalence and genuine diversity of ownership conditions

        1. 77.Who may apply for clearance

        2. 78.Procedure for obtaining clearance

        3. 79.Circumstances in which clearance may not be relied upon

      3. Investment transactions carried out by diversely owned funds

        1. 80.Treatment of investment transactions carried out by diversely owned funds

        2. 81.Meaning of “investment transaction”

        3. 82.Meaning of “relevant contract”: general

        4. 83.Meaning of “relevant contract”: options

        5. 84.Meaning of “relevant contract”: futures

        6. 85.Options and futures: further provisions

        7. 86.Meaning of “relevant contract”: contracts for differences

        8. 87.Interpretation of regulation 81(c)

        9. 88.Meaning of “units in a collective investment scheme”

        10. 89.Meaning of “transaction in a carbon emission trading product”

    8. CHAPTER 6A TRANSPARENT REPORTING FUNDS

      1. 89A.Transparent reporting funds

      2. 89B.Reportable income: general

      3. 89C.Adjustment in relation to income from other reporting funds

      4. 89D.Adjustment in relation to income from non-reporting funds: first case

      5. 89E.Adjustment in relation to income from non-reporting funds: second case

    9. CHAPTER 7 REPORTS TO PARTICIPANTS

      1. 90.Report to participants for a reporting period

      2. 91.Meaning of “reporting period”

      3. 92.Contents of report to participants: non-transparent funds

      4. 92A.Funds which do not operate equalisation arrangements: income adjustments on the basis of reported income

      5. 92B.Funds which do not operate equalisation arrangements: income adjustments on the basis of accounting income

      6. 92C.Funds which do not operate equalisation arrangements: computation period

      7. 92D.Contents of reports to participants: transparent reporting funds

      8. 93.Lengthy periods of account where full information not available

    10. CHAPTER 8 THE TAX TREATMENT OF PARTICIPANTS IN REPORTING FUNDS

      1. Tax treatment of the reported income of the fund in the hands of participants

        1. 94.Reported income: general provisions

        2. 94A.Equalisation amounts not treated as distributions

        3. 95.Participants chargeable to income tax: corporate funds

        4. 96.Participants chargeable to income tax: other non-transparent funds

        5. 97.Participants chargeable to income tax: transparent funds

        6. 98.Participants chargeable to corporation tax

      2. Disposals and deemed disposals of interests

        1. 99.Disposals of interests

        2. 100.Deemed disposals of interests

      3. Charitable companies and charitable trusts

        1. 101.Special provisions applying to charitable companies and charitable trusts

      4. Anti-avoidance provisions

        1. 102.Treatment of financial traders if conditions specified in regulation 73 are met

        2. 103.Amounts brought into account in computing trading profits or losses of financial traders

        3. 104.Interests not within regulation 103

        4. 105.Meaning of “financial trader”

    11. CHAPTER 9 THE PROVISION OF INFORMATION TO HMRC

      1. 106.Reporting requirements

      2. 107.Information obligations of reporting funds

    12. CHAPTER 10 BREACHES OF REPORTING FUND REQUIREMENTS

      1. 108.Types of breaches

      2. 109.Consequences of minor breaches

      3. 110.Differences between reported income and reportable income

      4. 111.Provision of report that is incorrect or incomplete

      5. 112.Cases where information is not provided

      6. 113.Serious breaches

      7. 114.Consequences of serious breaches

      8. 115.Appeal against exclusion from the reporting fund regime

    13. CHAPTER 11 LEAVING THE REPORTING FUND REGIME

      1. 116.Termination by notice given by reporting fund

      2. 117.Reporting fund not complying with requirements

    14. CHAPTER 12 CONSTANT NAV FUNDS

      1. Interpretation

        1. 118.Meaning of “constant NAV fund”

      2. Modified application of this Part

        1. 119.General

        2. 120.Modified application of Chapter 2

        3. 121.Modified application of Chapter 3

        4. 122.Disapplication of Chapters 4 to 9

        5. 123.Modified application of Chapter 10

        6. 124.Disapplication of Chapter 11

  5. PART 3A ANNUAL PAYMENTS TO NON-RESIDENTS

    1. 124A.Annual Payments – duty to deduct income tax

    2. 124B.Consequences of reasonable but incorrect belief

  6. PART 4 CONSEQUENTIAL AMENDMENTS

    1. 125.Amendment of the Inheritance Tax Act 1984

    2. 126.Amendment of ICTA

    3. 127.Amendment of TCGA 1992

    4. 128.Amendment of ITTOIA 2005

    5. 129.Amendment of ITA 2007

    6. 130.Amendment of FA 2008

    7. 131.Amendment of CTA 2009

  7. Signature

    1. SCHEDULE 1

      Transitional Provisions and Savings

      1. 1.In this Schedule— “distributing fund” means a fund which, immediately...

      2. 2.(1) This paragraph applies in the case of an existing...

      3. 3.(1) This paragraph applies in the case of an existing...

      4. 3A.In the case of a reporting fund which has an...

      5. 3B.(1) This paragraph applies in the case of a distributing...

      6. 3C.In the case of an exchange of an interest in...

      7. 4.(1) This paragraph applies in the case of an existing...

      8. 5.(1) This paragraph applies in the case of an existing...

      9. 6.(1) This paragraph applies in the case of an existing...

      10. 7.(1) This paragraph applies in the case of an arrangement...

    2. SCHEDULE 2

      Repeals

    3. SCHEDULE 3

      Abbreviations and Defined Expressions

      1. PART 1 Abbreviations of Acts

      2. PART 2 Index of expressions defined or otherwise explained in these Regulations

  9. Explanatory Note

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