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HMRC internal manual

Investment Funds Manual

Offshore Funds: introduction: Residence of offshore collective investment vehicles (S363A TIOPA 2010)

Offshore collective investment vehicles that are non-resident are outside the scope of UK except where specifically provided for (for example, where non-resident Capital Gains Tax applies). The usual residence tests apply for offshore investment vehicles, as modified by Section 363A Taxation (International and Other Provisions) Act 2010 which facilitates the management of such vehicles by UK resident fund managers without making them resident in the UK for tax purposes, provided that the vehicle is:

  1. A UCITS (Undertakings for Collective Investment in Transferable Securities) fund which is authorised in a foreign country or territory pursuant to Article 5 of the UCITS directive; or
  2. An Alternative Investment Fund (AIF) within the meaning of regulation 3 of the Alternative Investment Fund Managers Regulations 2013 which is authorised or registered in a foreign country or territory, or is not authorised or registered but has its registered office in a foreign country or territory

unless such UCITS fund or AIF is an excluded entity.

A UCITS or AIF is an excluded entity if it is:

  1. A unit trust scheme with UK resident trustees,
  2. A UK incorporated company,
  3. An investment trust company, or
  4. A company or group real estate investment trust.

Where S363A applies, a UCITS fund or AIF that would otherwise be treated as resident in the UK is to be treated as if it were not resident in the UK