IFM12427 - Offshore Funds: Reporting funds: application for reporting fund status: constant NAV funds 바카라 사이트“ modification of application process

Regulation 120 of SI 2009/3001

A 바카라 사이트śconstant NAV fund바카라 사이트ť is an offshore fund whose net asset value (expressed in the currency in which units are issued) does not fluctuate by more than an insignificant amount throughout the fund바카라 사이트™s existence, as a result of the nature of the fund바카라 사이트™s assets, and the frequency with which the fund distributes its income (regulation 118).

HMRC would expect that the stability of a constant NAV fund would be such that if units were denominated at, say, €1 (1 Euro), the fund would at all times sell and redeem at that price allowing only for any expenses of selling or redemption to make any difference to the unit price and that an investor, acting reasonably, would at all times, value a holding of units at €1 for each unit.

The application and reporting rules are simplified in a number of regards for constant NAV funds Application for reporting fund status - regulation 120

On making an application for reporting fund status, a constant NAV fund does not need to provide all of the items required by regulation 53 (see IFM12423). Instead, together with its application it is only required to provide -

바카라 사이트˘ a statement of the first period of account for which it is proposed that the fund should be treated as a constant NAV fund for the purposes of the regulations,

바카라 사이트˘ a statement that the fund is, or will be, a constant NAV fund at the beginning of that first period of account, and

바카라 사이트˘ an undertaking to notify HMRC if the fund ceases to be a constant NAV fund.

Unless HMRC rejects an application (for example because it is incomplete), a fund becomes a 바카라 사이트śconstant NAV fund바카라 사이트ť on whichever is the later of the first day of the first period of account for which it is proposed the fund should be a constant NAV fund, or the day on which the fund is established (the latter may be later where there is a delay in setting up an offshore fund, and the application was made in respect of a prospective constant NAV fund).

Once a fund has been accepted as a constant NAV fund, it does not need to comply with the requirements of Chapters 4 to 9 of the regulations (which deal with the preparation of accounts, the computation of reportable income, transactions not treated as trading, reports to participants (i.e. investors), the tax treatment of participants, and the provision of information to HMRC). The fund will then continue to be treated as a constant NAV fund until it notifies HMRC that it has ceased to be a constant NAV fund. However if, after a fund has been accepted as a constant NAV fund, the value of the fund바카라 사이트™s assets (expressed in the currency in which units in the fund are issued) rises by more than an insignificant amount and the fund has not notified HMRC that it has ceased to be a constant NAV fund then a participant who subsequently disposes of an interest in the fund and who makes a chargeable gain on the disposal is treated as making an offshore income gain (regulation 123).