The following Tax guidance note Produced in partnership with Michael Alliston of Herbert Smith Freehills LLP provides comprehensive and up to date legal information covering:
In order to retain its reporting fund status, a reporting fund must comply with certain obligations. This Practice Note describes the regulations that apply to:
the types of breaches (both 'minor' and 'serious') of the reporting funds regime conditions
the consequences of breaches
the rules for appealing against exclusion from the reporting fund regime, and
the procedure for a fund to voluntarily leave the reporting fund regime
HMRC notes that, in order for the reporting fund regime to work as intended, it is important that funds admitted into the regime meet the obligations placed on them by the regulations, and as funds will not otherwise be within the jurisdiction of HMRC (by virtue of being 'offshore'), there are sanctions available to HMRC to address breaches.
Reporting funds should be able to meet their obligations, but where a breach of the reporting fund requirements occurs, then HMRC states in its guidance that the intention is that any response should be reasonable and proportionate. However, where a fund commits a serious breach of the requirements of the regulations, or a combination of minor breaches within a certain period, the fund may be excluded from the reporting fund regime.
The rules applicable, and their impact, will depend on both:
the type of breach, and
the consequences of such breaches
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