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HMRC internal manual

Offshore Funds Manual

Investors in non-reporting funds: disposals of interests: death of participant - regulation 34

Where a participant in a non-reporting fund dies then the participant’s interest in the non-reporting fund is deemed to have been disposed of by the deceased person immediately before the deemed acquisition (on death) by the deceased’s personal representatives (Regulation 34(1) and Section 62(1)(a) TCGA).

The disposal is deemed to have taken place at a value equal to the value at which the interest is deemed to be acquired under section 62(1)(a) TCGA by the personal representatives - that is market value at the date of death.

If the disposal gives rise to an offshore income gain then it is chargeable to income tax (see OFM15000 to OFM15900).

An offshore income gain arises and resulting tax becomes payable before the estate of the deceased person is valued for inheritance tax purposes.