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HMRC internal manual

Investment Funds Manual

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

Regulation 42 of SI 2009/3001

If, the ‘basic gain’ (calculated under regulations 39 to 41) arising on the disposal of an interest in an offshore fund produces a loss, then the basic gain arising on the disposal is treated as nil. This means that, for the purposes of the regulations, no loss is to be treated as arising on a disposal and that any loss arising can be relieved only as a capital loss.  The effect of this is that the capital loss cannot be offset against offshore income gains of the same or of a later period.