Reporting funds: transactions not treated as trading: investment transactions - Regulations 81 to 89
Regulations 81 to 89 specify the types of transaction that are an “investment transaction” for the purposes of regulation 80. The regulations provide that an “investment transaction” is any transaction:
- in stocks or shares;
- in a “relevant contract”;
- which results in the diversely owned fund becoming party to a “loan relationship” or “related transaction”;
- in units in a collective investment scheme;
- in securities (not included in the above categories);
- consisting in the buying or selling of foreign currency; or
- in a carbon emissions trading product.
The categories above are the same categories that apply to UK AIFs, in regulation 14F of SI2009/2036. The meaning of the above terms is explained in guidance published in the Company Taxation Manual (‘CTM’) on the HMRC website and that guidance also applies for the purposes of regulations 81 to 89 of the Offshore Funds Regulations.
Any transaction that is not specified in regulations 81 to 89 will not be an “investment transaction” for the purposes of regulation 80. This does not mean, however, that the transaction will be a trading transaction by default. Such a transaction may still be non-trading on first principles (see OFM25400).