Definition of an offshore fund: Limited life companies: General
Condition C of S356 TIOPA 2010 would be satisfied where arrangements are expected to terminate at or within a predetermined time and produce a return by reference to the net asset value of the scheme property. There is no time limit - if arrangements have a fixed or determinable life then they are capable of coming within the meaning of a mutual fund and therefore possibly within the definition of an offshore fund, subject to the exception provided where condition F at S357(4) TIOPA2010 is met - see OFM06300 onwards.
In determining whether arrangements that have a fixed or determinable life are an offshore fund, it does not matter whether or not a reasonable investor could expect to realise all or part of an investment by reference to NAV if he or she disposed of an interest on the open market before the date on which the arrangements were designed, or could be determined, to terminate. Neither does it matter if shares in the entity are listed and trade at less than NAV before that date. In both circumstances, it is sufficient that a reasonable investor could expect to realise their investment by reference to NAV on termination of the arrangements, and condition C would therefore be satisfied.
The following pages provide further guidance regarding particular circumstances that may apply to limited life companies, and the effect on the consideration of whether arrangements would be viewed as mutual funds.