A 'distributing fund' is an offshore fund that distributes the whole, or substantially the whole, of its income. It also has to meet certain other conditions relating to its assets and investments. The full conditions can be found in Section 760 and Schedule 27 Income and Corporation Taxes Act 1988.
The Offshore Funds Centre is responsible for certifying offshore funds as distributing funds.
Investment in offshore funds
The Taxes Acts set out special rules for taxing gains arising on disposals of certain interests in 'offshore funds'. These gains are referred to as offshore income gains. However, where the offshore fund is a distributing fund throughout the period an interest is held, the special rules will not apply unless the fund operated equalisation arrangements.
The Offshore Funds Centre publishes a list of offshore funds certified as having 'distributing fund' status.
Click the links below for more information on
Tax impact of investment in a certified fund
The Self-Assessment Tax Return Guide contains further information about income from offshore funds. Investors should contact their own tax office if they have inquiries about the tax liability on an investment in an offshore fund.
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