IFM13338 | Offshore Funds: participants in offshore funds: participants within the charge to income tax: non-UK domicile: remittance basis

Where individuals not domiciled in the United Kingdom are taxed on the remittance basis, then the normal remittance basis rules will apply to income arising from the holding in the offshore fund (for detailed guidance see the Residence, Domicile and Remittance basis Manual from RDRM3000.

In the case of income that is reported by a reporting fund, but is not distributed, then that income has not been remitted to the UK.

Transparent Funds

In a case where the offshore fund is transparent for UK tax purposes then the income will arise from the underlying assets and not from the fund. In such a case, the income may sometimes arise in the UK (even though the fund itself is domiciled offshore). Where the income arises in the UK the remittance basis does not apply – the income is charged to tax on the UK resident individual as it arises. Where the income arises offshore then the remittance rules will apply.