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HMRC internal manual

Offshore Funds Manual

From
HM Revenue & Customs
Updated
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Reporting funds: breaches of reporting fund conditions: types of breaches: general - Regulation 108

The regulations define two types of breaches - ‘minor’ breaches and ‘serious’ breaches.

The two types of breaches are discussed in more detail in the following pages. In summary -

  • a ‘breach’ is, specifically, a breach of part of the requirements of a fund and / or its manager as set out in the regulations;
  • a breach will either be a ‘minor’ or ‘serious’ breach;
  • where a breach that is not a serious breach is discovered by the fund itself and rectified without HMRC having discovered the breach as a result of an informal request or a notice for information to be provided (see OFM28200) then it will not be considered to be a breach;
  • minor breaches (OFM29240), provided there is a reasonable excuse or where they are inadvertent and remedied as soon as reasonably possible, will not affect a fund’s reporting fund status unless there are a specified number of such minor breaches within a certain period
  • funds will only be excluded from the reporting fund regime for serious breaches (OFM29260), which includes a specified number of minor breaches within a certain period
  • there is an appeal process when a fund is excluded from the reporting fund regime by way of an ‘exclusion notice’ issued by HMRC - (see OFM29330).