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Collective investment schemes and offshore funds

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Following consultation, the government has laid two sets of regulations aimed at reducing complexity for investors in tax-transparent co-ownership authorised contractual schemes (CoACS).

  • The Co-ownership Authorised Contractual Schemes (Tax) Regulations, SI 2017/1209, introduce new legal requirements on operators of CoACS to provide tax information both to investors and to HMRC. They also introduce new requirements, where a scheme has made an investment in an offshore fund, that certain amounts must be treated as the income of participants in the scheme. The regulations are made under powers in Finance (No 2) Act 2017 and will have effect for accounting periods beginning on or after 1 April 2017.
  • The Collective Investment Schemes and Offshore Funds (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations, SI 2017/1204, bring offshore transparent funds under the same rules as CoACS and clarify how investors should compute the chargeable gain on disposals of units in the fund. The regulations set out how to establish the amount of allowable expenses in the chargeable gains computation, including the treatment of loan relationship and derivative contract debits and credits. They also clarify the interaction with expenditure which qualifies for capital allowances. The regulations come into force on 1 January 2018.