Reporting Fund Regime Notice - 3 November 2011
Reporting Fund Regime Overview
On 1 December 2009, Her Majesty's Revenue and Customs ('HMRC') introduced the Reporting Fund Regime ('RFR') which replaces the UK Distributor Status Regime ('UKDS'). The rules of the new Regime are applicable to accountung periods on or after this date.
What is the Reporting Fund Regime?
RFR is the new framework for the taxation of investments in offshore funds. Offshore funds which opted into the Regime and have been approved by HMRC are called 'Reporting Funds'. Funds which have not opted into the Regime are called 'Non-reporting Funds'.
What is the difference between Reporting Funds and Non-reporting Funds?
A UK shareholder who disposes of their interest in a Reporting Fund is liable to pay capital gains tax on any realised gains. All gains realised on disposals of interests in a Non-reporting Fund are subject to income tax.
What is the difference between the RFR and the UK Distributor Status Regime?
Under the UK Distributor Status Regime, UK shareholders were subject to income tax on the income they received from the Fund and capital gains tax on any gain arising on disposal of their interest in the Fund. In order to be certified as a Distributing Fund one of the conditions was that an offshore fund was required to physically distribute to its investors 85% of its tax adjusted profits on an annual basis.
Under the rules of the new Reporting Fund Regime, the requirement to make annual distributions of the fund's tax adjusted profits has been abolished. UK shareholders are subject to income tax on their share of Reportable Income as well as distributions received. On disposal of their interest, shareholders are subject to capital gains tax on any gain arising from disposal of their interest in the Fund, reduced by reportable income already charged to tax. Reportable income will be broadly the difference between the income the Fund earned in the period and amounts actually distributed.
Please click on the relevant link below to see details of the reportable income of each Fund:
Sterling Asset Management Fund PC
Euro Asset Management Fund PC
Americas Equity Fund PC
Chindia Equity Fund
European Equity Fund PC
Japan Equity Fund PC
Dollar International Equity Fund PC
Sterling International Equity Fund PC
Americas Equity Fund Feeder PC
Chindia Equity Fund Feeder
European Equity Fund Feeder PC
Japan Equity Fund Feeder PC
Dollar Total Return Bond Fund PC
Sterling Total Return Bond Fund PC
Disclaimer
This information is based on UK tax law at the time of publication, which may be subject to change. The information is intended to provide a general guide to the subject matter and should not be regarded as a basis for ascertaining the liability to tax in specific circumstances, in which case professional advice should be taken. Shareholders should consult a professional adviser for advice regarding their tax position.
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