747B Interpretation and application.

(1) In this Chapter—

“chargeable period” has the same meaning as in section 321(2);

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“deemed disposal” means a disposal of the type provided for in section 747E(6);

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“EEA Agreement” means the Agreement on the European Economic Area signed at Oporto on 2 May 1992, as adjusted by the Protocol signed at Brussels on 17 March 1993;

“EEA state” means a State, other than the State, which is a Contracting Party to the EEA Agreement;

“material interest” shall be construed in accordance with section 743;

“OECD” means the organisation known as the Organisation for Economic Co-operation and Development;

“offshore fund” has the meaning assigned to it by section 743;

“offshore state” means a State, other than the State, which is—

(i) a Member State of the European Communities,

(ii) a State which is an EEA state, or

(iii) a State which is a member of the OECD, the government of which have entered into arrangements having the force of law by virtue of ^[2]>section 826^<[2][7]>[2]>section 826(1)(a)^<[2]<[7][7]>section 826(1)^<[7];

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“relevant event” means the ending of a relevant period, where “relevant period” in relation to an offshore fund means a period of 8 years beginning with the acquisition of a material interest in the fund and each subsequent period of 8 years beginning immediately after the preceding relevant period;

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“relevant payment” means any payment including a distribution made to a person in respect of a material interest in an offshore fund, where such payments are made annually or at more frequent intervals, other than a payment made in consideration of the disposal of an interest in the offshore fund;

“return of income” has the meaning assigned to it by section 1084;

“specified return date for the chargeable period” has the meaning assigned to it by ^[8]>section 950^<[8][8]>section 959A^<[8];

“standard rate per cent” has the meaning assigned to it by section 4.

(2) ^[5]>This Chapter^<[5][5]>Subject to subsection (2A), this Chapter^<[5] applies to an offshore fund which—

(a) being a company, the company is resident in,

(b) being a unit trust scheme, the trustees of the unit trust scheme are resident in, or

(c) being any arrangements referred to in section 743(1), those arrangements take effect by virtue of the law of,

an offshore state.

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(2A) This Chapter does not apply to an offshore fund other than an offshore fund which—

(a) (i) is an undertaking for collective investment formed under the law of an offshore state,

(ii) is similar in all material respects to an investment limited partnership (within the meaning of the Investment Limited Partnership Act 1994), and

(iii) holds a certificate authorising it to act as such an undertaking, being a certificate issued by the authorities of that state under laws providing for the proper and orderly regulation of such undertakings,

(b) is authorised by or under any measures duly taken by a Member State for the purposes of giving effect to—

(i) Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), or

(ii) any amendment to that Directive,

(c) (i) is a company formed under the law of an offshore state,

(ii) is similar in all material respects to an authorised investment company (within the meaning of ^[9]>Part XIII of the Companies Act 1990^<[9][9]>Part 24 of the Companies Act 2014^<[9]),

(iii) holds an authorisation issued by the authorities of that state under laws providing for the proper and orderly regulation of such companies and that authorisation has not ceased to have effect, and

(iv) is an investment company—

(I) which raises capital by promoting the sale of its shares to the public, or

(II) each of the shareholders of which is an investor which, if the company were an authorised investment company within the meaning of ^[10]>Part XIII of the Companies Act 1990^<[10][10]>Part 24 of the Companies Act 2014^<[10] would be a collective investor within the meaning of section 739B,

or

(d) (i) is a unit trust scheme, the trustees of which are not resident in the State,

(ii) is similar in all material respects to an authorised unit trust scheme (within the meaning of the Unit Trusts Act 1990),

(iii) holds an authorisation issued by the authorities of that offshore state under laws providing for the proper and orderly regulation of such schemes and that authorisation has not ceased to have effect, and

(iv) provides facilities for the participation by the public, as beneficiaries under the trust, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property whatsoever.

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(3) For the purposes of this Chapter—

(a) (i) there shall be a disposal of an asset if there would be such a disposal for the purposes of the Capital Gains Tax Acts, and

(ii) where, on the death of a person, an asset which the person was competent to dispose, is a material interest in an offshore fund to which this Chapter applies, then, notwithstanding section 573(2)(b), such material interest shall be deemed to be disposed of and reacquired by the person immediately before the death of the person for a consideration equal to its then market value,

(b) an income shall be correctly included in a return made by a person, only where that income is included in a return of income made by the person on or before the specified return date for the chargeable period in which the income arises, and

(c) details of a disposal shall be correctly included in a return made by a person, only where details of the disposal are included in a return of income made by the person or, where the person has died, his or her executor or administrator, on or before the specified return date for the chargeable period in which the disposal is made.