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Amendment of Chapter 4 (certain offshore funds — taxation and returns) of Part 27 of Principal Act.
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46.—(1) Chapter 4 of Part 27 of the Principal Act is amended—
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(a) in section 747D by substituting the following for paragraph (b):
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“(b) where the person is a company and the payment is not taken into account as a receipt of a trade carried on by the company, the income represented by the payment shall be charged to tax under Case III of Schedule D.”,
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and
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(b) in section 747E by substituting the following for subsection (1):
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“(1) Where on or after 1 January 2001 a person who has a material interest in an offshore fund, disposes of an interest in the offshore fund and the disposal gives rise to a gain computed in accordance with subsection (2) then, notwithstanding sections 745 and 747, where the gain is not taken into account in computing the profits or gains of a trade carried on by a company, the amount of that gain shall—
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(a) be treated as an amount of income chargeable to tax under Case IV of Schedule D, and
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(b) where the person is not a company, and the person has correctly included details of the disposal in a return made by the person, the rate of income tax to be charged on that income shall, notwithstanding section 15, be the rate determined by the formula—
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(S + 3) per cent,
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where S is the standard rate per cent.”.
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(2) This section shall be deemed to have applied as on and from 1 January 2001.
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