Revenue Note for Guidance

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Revenue Note for Guidance

CHAPTER 4

Certain offshore funds – taxation and returns

Overview

Chapter 4, which was introduced into Part 27 by section 72 of the Finance Act 2001, provides a new regime for the taxation of investors in certain offshore funds.

747B Interpretation and application

Summary

This section is an interpretation section. It sets out the application of Chapter 4.

Details

(1), (2) & (2A) The taxation regime applies to offshore funds (as defined in section 743) that fall into one or other of the following 4 categories —

  • an undertaking for collective investment formed under the law of an offshore state that is similar in all material respects to an investment limited partnership (ILP) and that holds a certificate authorising it to act as such,
  • an undertaking for collective investment in transferable securities (UCITS),
  • a company formed under the law of an offshore state that is similar in all material respects to an authorised investment (i.e. “Part 24”) company, that holds a valid authorisation in respect of same, and that either issues shares to the public or has shareholders that, if it were a “Part 24” company, would be collective investors, or
  • a unit trust scheme with non-resident trustees that is similar in all material respects to an authorised unit trust scheme, that holds a valid authorisation in respect of same, and that provides facilities for the participation by the public in the trust.

An offshore state means a state which is —

  • a fellow Member State of the European Communities,
  • a fellow contracting party to the EEA Agreement, or
  • a member state of the OECD with which Ireland has a double taxation agreement.

(3) The capital gains tax provisions governing when there is a disposal of an asset also apply to determining when there is a disposal of an interest in an offshore fund.

An interest in an offshore fund is treated as having been disposed of and reacquired immediately before the death of the person with that interest.

An income from or details of a disposal of, an interest in an offshore fund is treated as having been correctly included in a return where the income or details of the disposal are included in a return of income made on or before the date on which it is required to be made.

Relevant Date: Finance Act 2021