IFM11800 - Non-resident investors in an exempt unauthorised unit trust (EUUT)

Eligible investors for an EUUT are investors which are exempt from UK taxation on chargeable gains other than by reason of residence (see IFM10220). For that reason non-resident investors will in most cases not be eligible investors. An exception here is that an ‘overseas pension scheme’ is considered to be an eligible investor for an EUUT by virtue of section 271(1A) TCGA 1992 which exempts such pension schemes from UK tax on chargeable gains.

Offshore funds are not eligible investors in EUUTs. This is the position even if all of an offshore fund’s investors would be considered eligible investors if they had directly invested in the EUUT.

Investors in transparent offshore funds are treated in the UK as having no interest in the underlying investments of the fund so the offshore fund itself is considered to be the unit holder in the EUUT. As the offshore fund is only exempt from capital gains tax by reason of residence it cannot be an eligible investor. This is the position for Common Contractual Funds (CCF) and Fonds Commun de Placement (FCP).