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HMRC internal manual

Offshore Funds Manual

HM Revenue & Customs
, see all updates

Reporting funds: application for reporting fund status: constant NAV funds: modification of application process - Regulation 120

A “constant NAV fund” is an offshore fund whose net asset value (expressed in the currency in which units are issued) does not fluctuate by more than an insignificant amount throughout the fund’s existence, as a result of the nature of the fund’s assets, and the frequency with which the fund distributes its income (regulation 118).

HMRC would expect that the stability of a constant NAV fund would be such that if units were denominated at (say) €1 (1 Euro), the fund would at all times sell and redeem at that price allowing only for any expenses of selling or redemption to make any difference and that an investor, acting reasonably, would at all times, value a holding of units at €1 for each unit.

The application and reporting rules are simplified in a number of regards for constant NAV funds - see OFM30000 for details.