The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
An outline of the regime applying to offshore funds, including a description of the various types of fund, is discussed in the Offshore funds guidance note. You are advised to read that guidance note first. That guidance note also explains what is meant by a ‘reporting’ and a ‘non-reporting’ fund.
Reporting funds can be divided into ‘opaque’ funds (also known as non-transparent funds), where investors are regarded as owning units in the fund rather than as owning precise fractions of the underlying assets, and ‘transparent’ funds, where the investor has a share of the underlying fund assets. The fund manager should be able to tell the taxpayer whether his fund is opaque or transparent for tax purposes.
This guidance note considers the tax treatment of opaque funds, both reporting and non-reporting. For the tax treatment of transparent funds, see the Offshore funds - transparent funds guidance note.
A list of whether an entity is regarded as transparent or opaque for UK tax can be found in INTM180030.
This list may not be up to date in each case, and it is possible that HMRC’s view may now be different. If in doubt, clarification can be sought.
The taxation of offshore funds is very complex. This note is only an outline of the topic, and you may need specialist advice. In particular, there are further complexities where one offshore fund invests in another, has an ‘umbrella’ structure involving sub-funds, or where trusts are involved.
For further reading see Simon’s Taxes Division B5.7.
Absent specific legislation, it would be possible to roll-up undistributed income in an offshore fund, so that no tax was paid until the investor sold his investment, and at that point he would realise a chargeable gain, taxed at a lower rate. The offshore funds legislation aims to prevent the tax-free conversion of rolled-up income into capital gains.
This is achieved by dividing offshore funds into:
funds where the investor is taxed on the income as it
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
IntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeWithholding tax may be reduced under double tax treaties (DTT) or European directives, both of which may be subject to making a formal claim.This guidance note outlines the rules for UK withholding tax, and
This guidance note explains the general rules surrounding the availability of indexation allowance on the disposal of company assets and provides information on the rebasing rules for assets held on 31 March 1982. For an overview of the general position regarding company disposals, please refer to
This guidance note explains how to calculate the amount of tax that arises under the lifetime charge. In general terms the lifetime charge will apply to individuals who transfer property into a trust that is subject to the relevant property regime. See the Chargeable transfers and Occasions of
The basic rule is that all benefits provided to an employee by reason of their employment are taxable unless there is a specific exemption or other rule that means they are not chargeable to tax.ExemptionsThe main exemptions for employee benefits are in ITEPA 2003, ss 227–326B (Pt 4).Below is an
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.