Revenue Note for Guidance

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Revenue Note for Guidance

747F Reconstructions and amalgamations in offshore funds


This section sets out the treatment, for tax purposes, of reconstructions or amalgamations of offshore finds to which the Chapter applies. It provides that, where such funds are reconstructed or amalgamated, the disposal of the original units or shares will not be taxable and the new units or shares will be treated as being acquired at the same time and cost as the original units or shares.


(1) A reconstruction or amalgamation scheme is defined as meaning an arrangement where each person who has a material interest in an offshore fund gets, in place of that interest, a material interest in another offshore fund which is proportional to the value of the original interest and the value of the original interest becomes negligible as a result.

(2) Where, in connection with a reconstruction or amalgamation scheme, a person disposes of an interest and receives a new interest in its place, the disposal will not give rise to a gain and the new interest is treated as being acquired at the same time and cost as the interest that was disposed of.

Relevant Date: Finance Act 2021