IFM13440 - Offshore Funds: participants in offshore funds: the charge to tax on disposal of an interest in a non-reporting fund: transfer of assets abroad

Regulation 21 of SI 2009/3001

Effect of transfer of assets abroad rules on an offshore income gain

When an offshore income gain (OIG) arises to a person resident or domiciled outside the United Kingdom, then legislation relating to the transfer of assets abroad may apply in relation to that OIG as if the amount were foreign income becoming payable to that person. The relevant legislation is at Chapter 2 Part 13 ITA 2007.

This regulation is subject to two exceptions.

Exception 1 - non-resident settlements (regulation 21(4) and (5))

This rule does not apply to an OIG (or a part of an OIG) that arises to the trustees of a non-resident settlement and which is consequently treated as arising to an individual resident or ordinarily resident in the United Kingdom. Instead the rule relating to OIGs arising to non-resident settlements will take precedence (see IFM13420).

Exception 2- OIG treated as arising to person resident in the UK (regulation 21(3))

This rule does not apply to an OIG that arises to an offshore company and is, as a result of the rule described at IFM13442, treated as arising to a person resident in the UK as a result of the gain.