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HMRC internal manual

Offshore Funds Manual

From
HM Revenue & Customs
Updated
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Reporting funds: Computation of reportable income: Equalisation: 2011 transitional provisions

The 2011 transitional provisions apply to offshore funds that were reporting funds at 27 May 2011.

General provisions

Where an offshore fund is a reporting fund at 27 May 2011, the manager of such a fund is required to give statements as required by paragraphs (h) to (l) of regulation 53 (See OFM24640) by notice in writing to HMRC within 1 year of 27 May 2011.

The effect is that the fund will be treated as having operated equalisation, full equalisation or not operating equalisation arrangements in accordance with those statements from the time that the fund first became a reporting fund for the purposes of any report made to participants after 27 May 2011.

Special cases

The manager of such a fund may also apply in writing given with the notice under regulation 15(1) that the transitional provisions will not apply in relation to a reporting period which has ended before 27 May 2011.

HMRC will treat a fund, from the time it first became a reporting fund, as not operating equalisation arrangements and intending to make adjustments on the basis of reported income if either:

  • no notice is given, as required by paragraphs (h) to (l) of regulation 53 (See OFM24640), to HMRC within 1 year of 27 May 2011; or
  • Such a fund gives a statement that it does not intend to operate equalisation arrangements, and that it intends to make adjustments on the basis of accounting income and HMRC do not consider it reasonable to expect the difference between reported income per unit using this method and the reported income per unit on the basis of reported income to be 10% of less of the latter of those amounts. Where this applies, HMRC must give notice to the manager of the fund within 28 days of receiving of the statement being received.