IFM13276 - Offshore Funds: participants in offshore funds: participants within the charge to corporation tax: disposals: disposals of reporting funds that are constant NAV funds

Regulation 118 of SI 2009/3001

Generally, there should be no capital gain arising on the disposal of an investment in a constant NAV fund because, by definition, its capital value should remain constant. However, if after a fund has been accepted as a constant NAV fund, the value of the fund’s assets (expressed in the currency in which units in the fund are issued) rises by more than an insignificant amount and the fund has not notified HMRC that it has ceased to be a constant NAV fund, then a participant who subsequently disposes of an interest in the fund and who makes a chargeable gain on the disposal is treated as making an offshore income gain (regulation 123).