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An outline of the regime applying to offshore funds, including a description of the various types of fund, is discussed in the Offshore funds guidance note. You are advised to read that guidance note first. It also explains what is meant by ‘reporting’, ‘non-reporting’ and ‘distributing’ funds.

This guidance note discusses the tax position for a UK resident individual investor where an offshore fund changes its status, so that it ceases to be a reporting fund and becomes a non-reporting fund, or vice versa.

The taxation of offshore funds is very complex. This note is only an outline of the topic, and it may be necessary to take specialist advice. In particular, there are further complexities where one offshore fund invests in another, and where trusts are involved.

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