The Offshore Funds (Tax) (Amendment) Regulations 2014

Amendment to the Offshore Funds Regulations 2009

2.—(1) The Offshore Funds (Tax) Regulations 2009(1) are amended as follows.

(2) In regulation 17 (the charge to tax), after paragraph (4) insert—

“(4A) For the purposes of paragraph (4), where the asset was acquired on the vesting of variable remuneration represented by profit allocated under section 863I of ITTOIA 2005 (allocation of profit to the AIFM firm)(2), the date on which the variable remuneration was awarded is treated as the date on which consideration was given for the acquisition of the asset.

(4B) Terms used in paragraph (4A) which are also used in section 863I of ITTOIA 2005 have the same meaning as in that section.”

(3) In regulation 48 (consequences of conversion for participants)—

(a) in paragraph (2) for “paragraph (5)” substitute “paragraphs (5) and (5A)”,

(b) after paragraph (5) insert—

“(5A) If the interest owned by the participant represents variable remuneration represented by profit allocated under section 863I of ITTOIA 2005 (allocation of profit to the AIFM firm), an election may not be made under paragraph (2) if the fund ceases to be a non-reporting fund and becomes a reporting fund before the remuneration has vested in the participant.”

(1)

S.I. 2009/3001, amended by S.I. 2013/661; there are other amending instruments but none is relevant.

(2)

The Income Tax (Trading and Other Income 2005 (c. 5) is defined as ITTOIA 2005 in Part 1 of Schedule 3 to the Offshore Funds (Tax) Regulations 2009; section 863I was inserted by paragraph 15 of Part 3 of Schedule 17 to the Finance Act 2014 (c. 26).