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HMRC internal manual

Offshore Funds Manual

Reporting funds: computation of reportable income: introduction

Reporting funds must provide a report to their UK investors of the amounts actually distributed to participants and of any excess of reportable income over the amount so distributed in both cases per unit of interest in the fund (see OFM26000 onwards). A report must also be made to HMRC (see OFM28000 onwards).

In order to help a UK investor calculate their tax liability it would also be helpful if the fund provided in the report to investors a computation where it multiplied the amount actually distributed and any excess of reportable income over the amount so distributed, by the number of units relevant to that investor. Where the fund does not have information as to the number of units held by investors, it would be helpful to include wording in the report reminding investors to multiply the per unit amounts by the number of units held.

The reported income notified to each investor will be the investor’s proportionate share of the fund’s income derived from its accounts (which must be computed in accordance with international accounting standards (IAS), or alternatively in accordance with an approved generally accepted accounting practice (GAAP) - see OFM23000 onwards), with adjustments for certain items as required by the regulations. The following pages provide further guidance on the duty to provide a computation, the figures to be used and the required adjustments.