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Offshore funds are investments such as foreign unit trusts and open ended investment companies (OEIC).

This note introduces this topic, and aims to help you understand whether the taxpayer’s investment is within the special offshore funds tax regime and, if so, how it will be taxed. In particular, it explains the difference between ‘reporting’ and ‘non-reporting’ funds. It considers the tax position of the UK resident individual investor.

The taxation of offshore funds is very complex. This guidance note, and the linked notes on opaque funds, transparent funds, and changes in fund status, are only an outline of the topic, it may be necessary to take specialist advice. In particular, this suite of guidance notes does not cover the complexities where one offshore fund invests in another, has an ‘umbrella’ structure involving sub-funds, or where trusts are involved.

For further reading, see Simon’s Taxes Division B5.7.