IFM12248 - Offshore Funds: Definition of an offshore fund: exceptions to the meaning of mutual fund: condition ‘F’: no entitlement to income or any benefit arising from income – s357(6) TIOPA 2010

Even if a date of termination is stated or determinable under the arrangements, the arrangements are not a mutual fund if the participants have no entitlement to any income arising under the arrangements, or to any benefit arising from such income.

An example of an arrangement satisfying this condition might be the capital shares or units in an arrangement which splits the rights to capital and income between the holders of different classes of interest, where the holders of capital shares or units are not entitled to any of the income or any benefit arising from the income.

However, condition F will not be met where the arrangements are designed to produce a return for investors that is equivalent, in substance, to interest and such arrangements will therefore meet the definition of a mutual fund and will be an offshore fund (section 357(4)(c) TIOPA 2010 - see IFM12245).