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HMRC internal manual

Offshore Funds Manual

Investors in non-reporting funds: charge to tax on disposal of an interest: offshore income gains arising to certain non-resident companies - Regulation 24

Attribution of gains to members of non-resident companies

Section 13 TCGA applies to offshore income gains (with appropriate modifications) in the same way as it applies to capital gains.

In summary it applies to offshore income gains arising to non-resident companies which would be close companies if they were resident in the United Kingdom.

An offshore income gain of the company is treated as an offshore income gain of a member of the company in proportion to the member’s interest as a participator in the company (provided that the member’s share of the gain is more than one tenth of the whole gain after aggregation with that of connected persons).

This regulation takes precedence over the transfer of assets abroad rules (OFM15700 - see exception 2).

More detailed guidance on the application of section 13 TCGA is provided in the Capital Gains Manual.