Summary
KPMG hosted a presentation facilitated by Paul Hotchkiss, KPMG Tax Partner in the Isle of Man that will discuss:

• The new Reporting Fund regime – the basic rules and obligations;
• The newly proposed EU Savings Directive and what this might mean; and
• The life cycle of an HMRC tax investigation into a typical offshore fund structure, their approach and what can be learnt from it.

The last few years have seen a significant change in the UK taxation of offshore funds. The re-working of the UK taxation legislation applicable to offshore funds, the introduction of a white list confirming which transactions will not be considered trading transactions and other matters such as the proposed amended and extended EU Savings Directive, the increase in the UK income tax rate to a maximum of 50 percent coupled with a reduction in capital gains tax rate to 18 percent and the bond fund treatment for individual investors in offshore funds.

This mix of changes means there are going to be additional burdens imposed on funds administrators to keep records, to report information to investors and HMRC and possibly some reorganizations to manage to take advantage of the lower capital gains tax rate.

In addition to this Governments are also interested in increased transparency and the UK Government is no exception to this and consequently HMRC have increased the number of enquiries into offshore funds which hitherto might have little to do with the UK from an investor’s perspective.