745 Charge to income tax or corporation tax of offshore income gain

Summary

This section and Schedule 20 provide for the charging of offshore income gains as income and the calculation of the amount of those gains. The gains are to be treated as income chargeable under Case IV of Schedule D. The charge is on persons who are resident or ordinarily resident in the State during the year of assessment in which the income gain arises and also on persons who are not so resident but who trade in the State through a branch or agency. Non-domiciled individuals who are resident or ordinarily resident are charged only on a remittance basis. Charities are exempted from the charge so long as the income gain is applied for charitable purposes.

Details

(1) The offshore income gain, computed in accordance with Schedule 20, is treated for all purposes of income tax and corporation tax as income arising at the time of the disposal and chargeable under Case IV of Schedule D for the accounting period (in the case of a company) or the year of assessment (in the case of an individual) in which the disposal is made.

(2) The capital gains tax rules are applied to determine the application of the offshore fund provisions to individuals and companies resident outside the State. In general, offshore fund gains realised by persons who are neither resident nor ordinarily resident in the State are not chargeable.

(3) Offshore fund gains realised by a person resident outside the State are chargeable to corporation tax only if the person carries on a trade in the State through a branch or agency, and then only in respect of assets used for the purposes of the trade carried on in the State.

(4) Offshore fund gains realised by individuals who are resident or ordinarily resident in the State but domiciled outside the State are taxed on the part of the gains remitted into the State.

(5) Charities are exempt from tax on offshore fund gains. This exemption applies so long as the offshore fund gains are applicable and applied for charitable purposes. There is provision against the abuse of this exemption.

(6) Trustees are only chargeable if the general administration of the trusts is ordinarily carried on in the State or the trustees or a majority of them are resident and ordinarily resident in the State.

Relevant Date: Finance Act 2021