Readers' forum : Between the lines

I have been studying The Offshore Funds (Tax) Regulations SI 2009/3001 and there seems to be an opportunity to mitigate income tax on deemed income. Many reporting funds do not make any distributions and it strikes me that deemed income from any such fund can be reduced simply by ensuring that there is no holding in the fund at the end of any reporting period. I note that any deemed income if it cannot be mitigated is added to the base cost of the holding for capital gains tax purposes to prevent it being taxed twice.

Money realised from the disposal of a fund could be reinvested in another one. Alternatively a holding in the same fund could be reacquired at the beginning of the next reporting period. This strategy would incur some transaction costs and there would be a risk of being out of the...