IFM08350 - Co-ownership Authorised Contractual Schemes (CoACS): Income arising in offshore funds: introduction
There are a number of tax rules which ensure that income accruing within transparent offshore funds is taxable as it arises as the income of any investors within charge to UK tax.
The rules which apply to Co-ownership Authorised Contractual Schemes (CoACS) are contained in Part 3 of The Co-ownership Authorised Contractual Schemes (Tax) Regulations 2017 (SI 2017/1209).
The rules differ depending on whether the offshore fund in which the CoACS has invested is a reporting fund or a non-reporting fund. A reporting offshore fund is one where the fund has entered a special regime administered by HMRC in which the fund must submit to investors on an annual basis details of their share of the fund’s income, whether distributed or not, and a report of how that income was calculated to HMRC. Investors in a reporting fund are taxable on any income distributions received and on their share of any excess income for a period of account. A non-reporting fund is any offshore fund that is not a reporting fund. See IFM08360 for more details.
The rules for offshore funds are contained in The Offshore Funds (Tax) Regulations 2009 (SI 2009/3001) – see IFM12000.