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HMRC internal manual

Offshore Funds Manual

HM Revenue & Customs
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Reporting funds: reports to participants: general

Reporting funds are required to make available a report to each of their relevant participants (that is participants resident in the UK or which are themselves reporting funds) who hold an interest in the fund at the end of the reporting period in question for each reporting period (regulation 90(1)). This is to enable UK participants to make a return of their proportionate share of the reportable income (the ‘reported income’ for each investor). It can also be used by participants that are themselves reporting funds in computing their own reportable income.

Note that the obligation is to the participants (investors) rather than to nominees. A reporting fund can make a report available on a website where this may present difficulties - see below.

A ‘reporting period’ is (regulation 91) -

  • in the case of a reporting fund with a period of account of 12 months or less, the period of account ;
  • where the period of account is greater than 12 months, there will be two reporting periods: the first being the first 12 months of the period of account, and the second being the remainder of the period. (The period of account of a reporting fund cannot be longer than eighteen months - regulation 53(1)(b)).

The report must be made available to the participants within six months of the day immediately following the final day of the reporting period in question (regulation 90(5)), so for example a fund with a reporting period of, say, 1 January 2010 to 31 December 2010 must make the report available to its participants by no later than 1 July 2011. The report must be in English (regulation 90(6)).

A report can be ‘made available’ in a number of different ways -

  • it can be sent to UK investors by post,
  • it can be sent to UK investors by means of an electronic communications service (for example, as a PDF document attached to an email),
  • it can be made available on a website accessible to UK investors and to HMRC, or
  • it can be published in a newspaper which is published in English, in the United Kingdom, and is readily available in all parts of the United Kingdom.

If reports are not sent by post then the fund must agree to make the report available to the participant in some suitable further manner, if the participant so requires. This may include other methods, such as:

  • By a method of electronic communication
  • On a website accessible to relevant participants and HMRC
  • A report in a newspaper which is readily available in all parts of the United Kingdom
  • Any other form of communication agreed with the participant.

If a participant agrees to receive details of the report verbally by telephone (perhaps because they did not have access to the internet or other communication methods) HMRC would accept the information provided the participant keeps a personal record of the conversation, to which they would refer when completing their tax return.

The report does not have to be personalised for the investor - see OFM26200 for the required contents of a report.