(This note is not part of the Regulations)
These Regulations amend the Taxation of Chargeable Gains Act 1992 (“TCGA 1992”) so as to clarify how investors in co-ownership authorised contractual schemes (“CoACS”) or offshore transparent funds (“OTF”) who dispose of units should compute the chargeable gain.
Regulations 3, 4 and 5 amend existing provisions of TCGA 1992 so as to exclude OTF from their scope.
New provisions applying to both CoACS and OTF are then introduced by regulation 6 as new sections 103D and 103DA of TCGA 1992 (replacing existing section 103D of that Act). The effect of these provisions is that the same rules will apply to OTF as currently apply to CoACS. In particular, the provisions set out how to establish the amount of allowable expenses in the chargeable gains computation, including the treatment of loan relationship and derivative contract debits and credits, and also clarify the interaction with expenditure which qualifies for capital allowances.
Regulations 7 to 9 amend TCGA 1992 so as to clarify the capital gains treatment of insurers’ seed investments in collective investment schemes (by separating them from other investments).
Regulations 10 to 15 make consequential amendments to other primary legislation and regulation 16 makes a related amendment to the Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001).
A Tax Information and Impact Note covering this instrument was published on 5 December 2016 and is available on the website at https://www.gov.uk/government/collections/tax-information-and-impact-notes-tiins. It remains an accurate summary of the impacts that apply to this instrument.