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This help sheet is intended to provide guidance to UK investors with an interest in an offshore fund when completing their Self-Assessment return. It covers:

• what an offshore fund is
• how gains and income arising to UK investors from an interest in an offshore fund are taxed

This helpsheet is a guide only. It may not cover all aspects of your tax obligations relating to offshore funds. This help sheet also does not apply to UK investors who pay Corporation Tax. For further guidance on the taxation of offshore funds, refer to the Offshore Funds sections of the Investment Funds Manual.

What an offshore fund is

皇冠体育app UK has a specific tax regime which applies to UK investors in offshore funds.

皇冠体育app term 鈥榦ffshore fund鈥� has a specific meaning. Broadly, an offshore fund is an investment fund which is based outside the UK and meets certain conditions.

An investment fund may be an umbrella fund with several distinct sub-funds or compartments. Where that is the case, each sub-fund is treated as a separate offshore fund. Where a fund or sub-fund has more than one class of interest, each class of interest is treated as a separate offshore fund.

Examples of non-UK investment funds which could be an offshore fund if they meet the conditions are:

• non-UK unit trusts, such as a Jersey Property Unit Trust (JPUT) or Guernsey Property Unit Trust (GPUT)
• non-UK corporate funds, such as a Soci茅t茅 d鈥檌nvestissement 脿 Capital Variable聽(SICAV) or Irish Collective Asset-management Vehicle聽(ICAV)
• non-UK co-ownership arrangements, such as Fonds Commun du Placement (FCP) or Common Contractual Fund (CCF)

However, not all non-UK investment funds will fall within the definition of an offshore fund. For example, a non-UK partnership fund is not an offshore fund.

If you鈥檙e not sure whether you have an interest in an offshore fund, ask the fund manager.

Reporting offshore funds

Offshore funds can be 鈥榬eporting鈥� or 鈥榥on-reporting鈥�.

A reporting offshore fund is an offshore fund that has applied to HMRC, been approved and maintains its status as a reporting fund. Read a list of reporting funds.

皇冠体育app fund manager will be able to tell you whether the fund has applied to HMRC to become a reporting fund.

What it means to have an interest in a reporting offshore fund

A reporting offshore fund is required to report its income to HMRC and to its UK investors for each reporting period. Income reported in this way is known as 鈥榬eportable income鈥�.

Reportable income is given as an amount per unit. For each reporting period you鈥檒l need to multiply the amount of reportable income per unit by the total amount of units you hold at the end of the reporting period.

UK investors are taxed on their full share of reportable income, even if it has not been distributed. 皇冠体育app difference per unit between your reportable income and the income that is distributed to you is known as 鈥榚xcess reported income鈥�.

皇冠体育app fund may operate equalisation arrangements in which adjustments are required in the calculation of reportable income. Consult your fund manager and the Investment Fund Manual for further information.

How to report income from a reporting offshore fund

You should report any income from reporting funds, including any excess reported income, on your Self Assessment return.

皇冠体育app type of income you鈥檙e treated as receiving depends on the type of offshore fund you hold an interest in:

• if the offshore fund is a company and more than 60% of its investments are in interest bearing assets, report the income as interest 鈥� this type of fund is commonly referred to as a 鈥榖ond fund鈥�
• if the offshore fund is a company but is not a 鈥榖ond fund鈥�, report the income as a dividend
• if the offshore fund is 鈥榯ransparent鈥�, income arising from the offshore fund retains its original character 鈥� this could be a mixture of different types of income (for example, property income, dividends, or interest) which you should report separately.
• if the offshore fund is a unit trust which is non-transparent, report the income as miscellaneous income

If you鈥檙e not sure about which of these categories applies to you, contact the fund manager.

Where to report your income in your Self Assessment return

Income from a fund, including excess reported income, should be returned in the Foreign Pages (SA106) tax return in the following areas:

• if the income is treated as interest, report it on pages 2 and 3 under 鈥業nterest and other income from overseas savings鈥�
• if the income is treated as a dividend, report it on pages 2 and 3 under 鈥楧ividends from foreign companies鈥�
• if the income is treated as property income, report it on pages 4 and 5 under 鈥業ncome from land and property abroad鈥�
• if the income is treated as miscellaneous income, report it on pages 2 and 3 under 鈥業nterest and other income from overseas savings鈥�

If you do not know which category the income from your offshore fund falls into, you should either:

• contact the fund manager to seek advice
• speak to a tax advisor

What information a reporting offshore fund will provide

Reporting funds are required to provide you with a report so that you can determine your share of the reportable income.

皇冠体育appy鈥檒l normally issue this report electronically (for example, as a PDF document attached to an email), or on a publicly available website. 皇冠体育app report will provide the information you need to determine your excess reported income from the fund.

When to declare income from a reporting offshore fund

皇冠体育app normal tax rules apply to income which is distributed by the offshore fund. You would normally need to report income in the tax year you get it.

Excess reported income is treated as being received on the 鈥榝und distribution date鈥�. 皇冠体育app fund distribution date for a reporting fund is 6 months after the last day of the reporting period.

For example, if the reporting period ends on the 31 July 2022, then the fund distribution date is 31 January 2023. You鈥檒l need to report the excess reported income for that period in the Self Assessment return for the 2022 to 2023 tax year.

If you have not received a report from the fund manager by the time you need to file a Self Assessment return, then you should include your best estimate of the excess reported income. You may then need to file amended returns when you finally get the report.

Disposing of shares or units in a reporting offshore fund

If you dispose of your shares or units in a reporting offshore fund, you will be subject to Capital Gains Tax on any gain you realise.

Any excess reported income which arose to you during the period in which you owned the shares or units can be deducted when calculating your capital gain. This ensures you鈥檙e not subject to double tax on the excess reported income.

Non-reporting offshore funds

A non-reporting offshore fund is a fund that has not obtained reporting status (or has left or been excluded from the reporting fund regime). 皇冠体育app fund does not report its income to HMRC.

If you have an interest in a non-reporting offshore fund

For non-reporting funds, there is no equivalent excess reported income. That means you will only be taxed on income which is distributed to you.

When income from a non-reporting offshore fund is distributed to you, the type of income you are treated as receiving for UK tax purposes depends on the type of offshore fund you hold an interest in.

皇冠体育app 4 different types of offshore fund explained in the section 鈥楬ow to report income from a reporting offshore fund鈥� also applies to non-reporting offshore funds. If you鈥檙e not sure about which of these categories applies to you, contact the fund manager.

Disposing of shares or units in a non-reporting offshore fund

If you dispose of your shares or units in a non-reporting offshore fund, any gain you realise will normally be treated as an 鈥榦ffshore income gain鈥� unless an exception applies. In this case, consult the Investment Funds Manual for more information.

You will be subject to Income Tax, rather than Capital Gains Tax, on any offshore income gain you realise.

Where to report offshore income gain in your Self Assessment return

Report your offshore income gain in the Foreign Pages (SA106) on page 6 鈥極ther overseas income and gains鈥�.

What to declare if you hold your investment in an offshore fund through an ISA

Investments in non-reporting and reporting offshore funds can be held within the ISA wrapper.

If your investment in the fund is held through an ISA, then you do not need to declare the income or gains from these funds.