IFM13274 - Offshore Funds: participants in offshore funds: participants within the charge to corporation tax: disposals: disposals of tax transparent reporting funds

Even where regulation 29 of SI 2009/3001 is capable of applying to exempt gains on disposal of interests in an income transparent fund, the fund can still choose to apply for reporting fund status. A fund may do so because, for example, it wishes to exceed the percentage limit for investment in other non-reporting funds, it does not wish to monitor that limit or it considers that being approved as a reporting fund will be beneficial in attracting UK investors.

These funds are transparent for income purposes only and remain opaque for capital gains purposes. So, the capital gains charge will only arise to a UK investor on the disposal (deemed or actual) or part-disposal by the investor of their investment in the fund and not on the disposal by the fund of any of its underlying assets.