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HMRC internal manual

Savings and Investment Manual

Collective investment schemes: offshore funds: what is a non-qualifying fund?

Non-qualifying funds

The information in this manual applies to transactions up to 30 November 2009. The Offshore Funds Manual is currently being updated for the offshore funds regime from 1 December 2009.

An offshore fund is a non-qualifying fund at all times except in relation to a period for which it has been certified as a distributing fund.

The Collective Investment Schemes Centre Sheffield decides whether or not a fund will be certified as a distributing fund and questions on this point should be addressed to them.

Guidance on certification is available to fund managers and may be located on the HMRC website at 

It is important to remember that if a fund has been a non-qualifying fund at any time during a UK investor’s period of ownership of a material interest (SAIM6340) in that fund, any gain arising on that investor’s disposal of his holding will attract the possibility of a charge to tax under Schedule D Case VI or ITTOIA05/PT5/CH8. This will be the case even if the fund may have attained distributing fund status for another period or periods before, during or after the period of ownership in question.