Introduction New tax regime to be in regulations
37.In addition to the new definition of “offshore fund”, the Government has announced that a new tax regime to be set out in regulations will start from 1 December 2009. Regulations will be made under powers in FA 2008 (as amended by this Schedule) which will apply to offshore funds as defined by this Schedule. Draft regulations have been published and have been the subject of consultation and will be further updated to reflect the new definition. The first set of the regulations will be subject to the affirmative procedure. The affirmative procedure is used for substantial and important portions of delegated legislation on which a high degree of scrutiny is sought.
38.The draft regulations will be updated to provide specific exceptions to ensure that there will be no double taxation where investors’ interests in offshore funds are subject to tax as income under other tax provisions.