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HMRC internal manual

Offshore Funds Manual

HM Revenue & Customs
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Investors in non-reporting funds: exceptions to the charge to tax: excluded indexed securities - Regulation 25(5)

ITTOIA05/S433 explains the meaning of ‘excluded indexed securities’. They are outside the deeply discounted security rules, and are instead taxed under the capital gains rules. There is further guidance on excluded indexed securities in the Savings and Investment Manual (‘SAIM’).

Where an interest in an offshore fund would fall to be treated as an excluded indexed security, any gain arising on disposal will not be taxed as an offshore income gain, in order that the capital gains treatment is preserved.