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HMRC internal manual

Investment Funds Manual

Offshore Funds: investors in non-reporting funds: computation of offshore income gain: introduction

Regulation 38 of SI 2009/3001

An offshore income gain (‘OIG’) will arise when a UK investor disposes of an interest in:

  • a non-reporting fund;
  • a reporting fund that has not had reporting fund status at a time in the period during which the investor held their interest (and in respect of which no election was made under paragraph (4) of Schedule 1 to the Offshore Funds (Tax) Regulations 2009) at the appropriate time (see IFM13270 and IFM13370); or
  • a reporting fund which was previously a non-qualifying fund (i.e. one that did not have distributing fund status) at a time in the period during which the investor held their interest (and in respect of which no election was made under paragraph (4) of Schedule 1 to the Offshore Funds (Tax) Regulations 2009 at the appropriate time),

  • and a basic gain arises on such a disposal.

The OIG will be an amount equal to the basic gain. The following pages explain that term, and the more detailed provisions that apply to such disposals.