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but section 2(4) shall be disregarded for the purposes of clause (b).

(d) the form of the distribution is such that, if any sum forming part of it were received in the State by a person resident in the State and did not form part of the profits of a trade, profession or vocation, that sum would be chargeable to tax under Case III of Schedule D,

Income taxable under Case III of Schedule D

(i) are chargeable to tax under Case III of Schedule D in respect of such of those sums as are referable to their interests, or

(5) For the avoidance of doubt it is hereby declared that, if any sums forming part of the offshore fund’s income for any period have been received by the fund without any deduction of or charge to tax by virtue of section 43, 49, 50 or 63, the effect of the assumption in subparagraph (3)(a) is that those sums are to be taken into account in determining the total profits referred to in subparagraph (2).

(5) For the avoidance of doubt it is hereby declared that, if any sums forming part of the offshore fund’s income for any period have been received by the fund without any deduction of or charge to tax by virtue of section 43, 49, 50 or 63, the effect of the assumption in subparagraph (3)(a) is that those sums are to be taken into account in determining the total profits referred to in subparagraph (2).

(5) For the avoidance of doubt it is hereby declared that, if any sums forming part of the offshore fund’s income for any period have been received by the fund without any deduction of or charge to tax by virtue of section 43, 49, 50 or 63, the effect of the assumption in subparagraph (3)(a) is that those sums are to be taken into account in determining the total profits referred to in subparagraph (2).

(5) For the avoidance of doubt it is hereby declared that, if any sums forming part of the offshore fund’s income for any period have been received by the fund without any deduction of or charge to tax by virtue of section 43, 49, 50 or 63, the effect of the assumption in subparagraph (3)(a) is that those sums are to be taken into account in determining the total profits referred to in subparagraph (2).

(c) a deduction equal to any amount of tax (paid under the law of a territory outside the State) taken into account as a deduction in determining the income of the fund for the account period in question but which, because it is referable to capital rather than income, is not to be taken into account by virtue of section 71(1) or 77(6);

(c) a deduction equal to any amount of tax (paid under the law of a territory outside the State) taken into account as a deduction in determining the income of the fund for the account period in question but which, because it is referable to capital rather than income, is not to be taken into account by virtue of section 71(1) or 77(6);

(b) in determining whether and to what extent any expenditure is deductible under section 83 in computing the fund’s Irish equivalent profits for that period, so much of the business of the fund as does not consist of dealing in commodities shall be treated as a business carried on by a separate company.

(c) any dividends or distributions which by virtue of section 129 should be disregarded in computing income for corporation tax purposes are nevertheless to be taken into account in that computation in the like manner as if they were dividends or distributions of a company resident outside the State.

(4) In the application of section 730(3)(c) to an offshore fund, for “more than 10 per cent”, in so far as it would otherwise refer to the share capital of a trading company or to any class of such share capital, “50 per cent or more” shall be substituted.

(1) For the purposes of Chapter 2 of Part 27, an offshore fund pursues a full distribution policy with respect to an account period if—

(3) For the purposes of Chapter 2 of Part 27, an offshore fund shall be regarded as not pursuing a full distribution policy with respect to an account period for which the fund does not make up accounts.

(b) is a disposal to which Chapter 2 of Part 27 applies (whether by virtue of subsection (3) of section 742 or otherwise) or is one to which that Chapter would apply if subsections (5) and (6) of that section applied generally and not only for the purpose of determining whether, by virtue of subsection (3) of that section, there is a disposal to which that Chapter applies,

(1) For the purposes of Chapter 2 of Part 27, an offshore fund pursues a full distribution policy with respect to an account period if—

(3) For the purposes of Chapter 2 of Part 27, an offshore fund shall be regarded as not pursuing a full distribution policy with respect to an account period for which the fund does not make up accounts.

(b) is a disposal to which Chapter 2 of Part 27 applies (whether by virtue of subsection (3) of section 742 or otherwise) or is one to which that Chapter would apply if subsections (5) and (6) of that section applied generally and not only for the purpose of determining whether, by virtue of subsection (3) of that section, there is a disposal to which that Chapter applies,

(b) is a disposal to which Chapter 2 of Part 27 applies (whether by virtue of subsection (3) of section 742 or otherwise) or is one to which that Chapter would apply if subsections (5) and (6) of that section applied generally and not only for the purpose of determining whether, by virtue of subsection (3) of that section, there is a disposal to which that Chapter applies,

(c) is not a disposal with respect to which the conditions in subsection (4) of section 742 are fulfilled, and

(7) Subsection (2) of section 742 shall apply for the purposes of this paragraph as it applies for the purposes of that section.

(1) Subparagraph (2) shall apply if any sums which form part of the income of an offshore fund within paragraph (b) or (c) of section 743(1) are of such a nature that—

(a) in the case of an offshore fund within section 743(1)(a), directly and beneficially owned by the fund,

(b) in the case of an offshore fund within section 743(1)(b), directly owned by the trustees of the fund for the benefit of the fund, and

(c) in the case of an offshore fund within section 743(1)(c), owned in a manner which as near as may be corresponds either to clause (a) or (b).

Section 744.

(b) those interests (together with other interests which the primary fund may have) are such that, by virtue of paragraph (a) of subsection (3) of section 744 or, if the other fund concerned is a company, paragraph (b) or (c) of that subsection, the primary fund could not apart from this paragraph be certified as a distributing fund in respect of the account period, and

then, in determining whether in section 744(3) (other than paragraph (d)) anything prevents the primary fund being certified as mentioned in clause (b), the interests of the primary fund in that other fund shall be disregarded except for the purposes of determining the total value of the assets of the primary fund.

(a) section 744(3) (other than paragraph (d)) shall apply in relation to the primary fund with the modification in paragraph 7 (in addition to that provided for by subparagraph (2)), and

(b) that interest is to be taken into account in determining whether in section 744(3) (other than paragraph (d)) anything prevents the primary fund being certified as a distributing fund in respect of that account period, and

then, for the purposes of the application in relation to the primary fund of section 744(3) (other than paragraph (d)), at any time when the assets of the qualifying fund include the interest referred to in clause (c), the primary fund’s share of that interest shall be treated as an additional asset of the primary fund.

(2) In any case where the assets of an offshore fund for the time being include an interest in a trading company, section 744(3) shall apply subject to the modifications in subparagraphs (3) and (4).

(3) In the application of section 744(3)(b) to so much of the assets of an offshore fund as for the time being consists of interests in a single trading company, “20 per cent” shall be substituted for “10 per cent”.

(1) In relation to an offshore fund which has a wholly-owned subsidiary which is a company, section 744(3) or Part 1 of this Schedule shall apply subject to the modifications in subparagraph (4).

(4) The modifications referred to in subparagraph (1) are that for the purposes of section 744(3) and Part 1 of this Schedule—

(1) Section 744(3)(c) shall not apply to so much of the assets of an offshore fund as consists of issued share capital of a company which is either—

(b) that holding is such that by virtue of section 744(3)(c) the fund could not (apart from this paragraph) be certified as a distributing fund in respect of that account period,

then, if the condition in subparagraph (3) is fulfilled, that holding shall be disregarded for the purposes of section 744(3)(c).

14. Where in the case of any account period of an offshore fund it appears to the Revenue Commissioners that there has been a failure to comply with any of the conditions in paragraphs (a), (b) and (c) of section 744(3) (as modified, where appropriate, by the preceding provisions of this Part of this Schedule) but they are satisfied that the failure—

(d) the Revenue Commissioners are satisfied that nothing in subsection (2) or (3) of section 744 prevents the fund being so certified.