IFM12100 - Offshore Funds: introduction: background to the treatment of UK investors in offshore funds
A tax regime for UK investors in offshore funds was first introduced in 1984. Its purpose was to counter arrangements that had enabled investors within the charge to UK tax (바카라 사이트˜UK investors바카라 사이트™) to accumulate income in an offshore fund free of tax and, when the investment was realised, to be subject only to tax on capital gains instead of having to pay tax on income. By way of contrast, UK investors had to pay tax annually on income from UK funds. The 바카라 사이트˜offshore fund rules바카라 사이트™ were substantially updated in 2009 and are now within Part 8 of the Taxation (International and Other Provisions) Act 2010, and The Offshore Funds (Tax) Regulations 2009 (SI 2009/3001) as subsequently amended.
The current regime has effect for the purposes of -
- income tax for the tax year 2009-10 and subsequent tax years, and for distributions made on or after 1st December 2009, and for the purposes of capital gains tax in relation to disposals made on or after 1 December 2009;
- for the purposes of corporation tax on income, for accounting periods ending on or after 1st December 2009, and for the purposes of corporation tax on chargeable gains in relation to disposals made on or after 1 December 2009.
The purpose of the offshore funds tax regime is to charge gains to tax as income rather than as capital gains on realisations of interests in offshore fund investments, unless certain conditions are met.
Further details regarding the operation of the pre-2009 regime can be found in the archived 바카라 사이트˜Offshore Funds Manual바카라 사이트™. The remainder of this part of the Investment Funds Manual is concerned with the current rules and references made to 바카라 사이트˜offshore funds바카라 사이트™ are made in that context.