Rules drafted for calculating equalisation

As mooted at the end of last year, HMRC have published draft legislation relating to planned amendments to the provision made for equalisation in the Offshore Funds (Tax) Regulations 2009 (SI 2009/3001).

The changes account for the effect of equalisation arrangements in the calculation of reportable income where an offshore reporting fund operates equalisation arrangements.

Transitional provisions, to be provided when the changes are enacted in spring 2011, will give reporting funds the option of operating the new rules for previous reporting periods where a report has not already been issued.

Further changes to cater for reporting funds that do not operate equalisation arrangements will be included in the document, to be published early in 2011.
The draft legislation also incorporates other minor amendments to the regulations.

First, it includes an amendment to provide for continuity of reported income where TCGA 1992, s 106A applies to a disposal and acquisition covering the end of a reporting period.

Second, changes are made to the transitional rules in schedule 1 to the regulations that widen the ability to apply for distributing fund status in the transitional periods and ensure that the regulations cater for earlier periods.

Finally, there is a correction to the end date for the transitional period as previously announced.

Issue: 4287 / Categories: News , Investments