IFM12557 - Offshore Funds: Reporting Funds: computation of reportable income: transactions not treated as trading: treatment of investment transactions
Regulation 80 of SI 2009/3001
If a reporting fund that is a 바카라 사이트榙iversely owned fund바카라 사이트�, (i.e. one that meets the conditions in regulations 74 and 75 (see IFM12555)) carries out an investment transaction as defined within regulation 2 of the Investment Transactions (Tax) Regulations 2014 (SI 2014/685 - see IFM18000) then the transaction in question will not be treated as a trading transaction.
Specifically, this means that for the purposes of computing the reporting fund바카라 사이트檚 reportable income in accordance with Chapter 5 of the Offshore Funds (Tax) Regulations the transaction in question will be treated as an investment transaction and cannot be re-characterised as a trading transaction (but see the paragraph below under the heading 바카라 사이트楥apital and revenue바카라 사이트�).
Where the conditions are met, all capital profits, gains or losses arising from 바카라 사이트渋nvestment transactions바카라 사이트� are treated as non-trading. Capital profits, gains and losses for this purpose are any profits, gains or losses treated as capital for accounting purposes under the Investment Association Statement of Recommended Practice (SORP).
Capital and revenue
Where regulation 80 applies, any investment transactions 바카라 사이트� (see IFM12558) are treated as non-trading transactions. Any gains and losses from 바카라 사이트渋nvestment transactions바카라 사이트� dealt with under the heading 바카라 사이트渘et capital gains/losses바카라 사이트� in accordance with the Investment Association SORP may be adjusted in accordance with regulations 64 or 65. Any other gains and losses from 바카라 사이트渋nvestment transactions바카라 사이트� remain included in the computation of reportable income.
For example, interest calculated under the effective yield method (or some similar method calculated under regulation 66) must be included within the computation of reportable income even where regulation 80 applies to prevent any capital profit on disposal of the instrument being characterised as trading income.
Reporting funds and trading
Where regulation 80 does not apply, it remains a question of fact whether or not activities carried out by a reporting fund amount to trading for tax purposes.
In such cases, the normal principles for determining whether or not there is a trade will apply. There is no automatic assumption that transactions which are not 바카라 사이트渋nvestment transactions바카라 사이트� for the purposes of regulation 80 will be trading transactions by default. Where a reporting fund carries out financial transactions and regulation 80 does not apply, the principles set out in the guidance in the Business Income Manual should be considered.