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Offshore funds review
The taxation of offshore funds is the subject of a consultative document recently published by the Revenue. The Government's stated objectives are that:
* United Kingdom investors are taxed fairly on their savings and investments;
Offshore funds review
The taxation of offshore funds is the subject of a consultative document recently published by the Revenue. The Government's stated objectives are that:
* United Kingdom investors are taxed fairly on their savings and investments;
* appropriate account is taken of market and business factors, and in particular the significant commercial developments since 1984 when the current offshore funds régime was introduced;
* the United Kingdom remains an attractive place for funds business;
* United Kingdom-based funds (as well as those based offshore) are not made uncompetitive;
* proper account is taken of other developments in United Kingdom tax legislation;
* as far as possible, any changes in tax law that are made as a result of the review are simple to understand and operate and that United Kingdom investors and fund managers are not faced with costly compliance pressures.
Much of the document is concerned with the requirements for a fund to have distributor status, but the treatment of investors is also considered. A tentative suggestion is that investors in non-distributor funds should be taxed annually on any increase in the value of their investment, and this idea has already provoked a strong negative response from the industry and investors alike.
Comments on the points raised in the document should be sent by 31 July 2002 to Mike Howe, Revenue Policy, Business Tax, Room E4, 22 Kingsway, London WC2B 6NR, e-mail: mike.howe@ir.gsi.gov.uk. Copies of the document, 'Offshore Funds: A Consultation Document', can be obtained from that address or from www.inlandrevenue.gov.uk.
