Commentary

C1.620 Investments in offshore funds

Capital gains tax
Capital gains tax | Commentary

C1.620 Investments in offshore funds

Capital gains tax | Commentary

Offshore income gains

C1.620 Investments in offshore funds

An offshore fund is an investment vehicle, which is UK non-resident and so outside the scope of direct UK taxation (except insofar as non-residents can otherwise be taxable in the UK). In certain circumstances such vehicles can be used to 'roll up' income profits which a UK resident investor can then realise by disposing of his interest in the fund as a capital disposal. The offshore funds rules are anti avoidance provisions which treat gains realised on the disposal of an interest in an offshore fund as income (an 'offshore income gain') and not as a capital receipt.

As of 1 December 2009, the rules regarding what constitutes an offshore fund, and how investments in, and disposals of interests in, an offshore fund are taxed have been revised, see Division B5.7.

The following rules came into force on 1 December 2009 and apply for CGT and CTCG purposes to disposals on or after that date1.

An offshore fund

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