Finance Act 2007

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Amendment of Part 27 (unit trusts and offshore funds) of Principal Act.

39.— (1) Part 27 of the Principal Act is amended—

(a) in section 747B—

(i) in subsection (2), by substituting “Subject to subsection (2A), this Chapter” for “This Chapter”, and

(ii) by inserting the following after subsection (2):

“(2A) This Chapter does not apply to an offshore fund other than an offshore fund which—

(a) (i) is an undertaking for collective investment formed under the law of an offshore state,

(ii) is similar in all material respects to an investment limited partnership (within the meaning of the Investment Limited Partnership Act 1994), and

(iii) holds a certificate authorising it to act as such an undertaking, being a certificate issued by the authorities of that state under laws providing for the proper and orderly regulation of such undertakings,

(b) is authorised by or under any measures duly taken by a Member State for the purposes of giving effect to—

(i) Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS), or

(ii) any amendment to that Directive,

(c) (i) is a company formed under the law of an offshore state,

(ii) is similar in all material respects to an authorised investment company (within the meaning of Part XIII of the Companies Act 1990 ),

(iii) holds an authorisation issued by the authorities of that state under laws providing for the proper and orderly regulation of such companies and that authorisation has not ceased to have effect, and

(iv) is an investment company—

(I) which raises capital by promoting the sale of its shares to the public, or

(II) each of the shareholders of which is an investor which, if the company were an authorised investment company within the meaning of Part XIII of the Companies Act 1990 would be a collective investor within the meaning of section 739B,

or

(d) (i) is a unit trust scheme, the trustees of which are not resident in the State,

(ii) is similar in all material respects to an authorised unit trust scheme (within the meaning of the Unit Trusts Act 1990 ),

(iii) holds an authorisation issued by the authorities of that offshore state under laws providing for the proper and orderly regulation of such schemes and that authorisation has not ceased to have effect, and

(iv) provides facilities for the participation by the public, as beneficiaries under the trust, in profits or income arising from the acquisition, holding, management or disposal of securities or any other property whatsoever.”,

and

(b) by inserting the following after section 747A:

“Treatment of certain offshore funds.

747AA.— Without prejudice to ‘offshore fund’ having the meaning assigned to it by section 743 for the purposes of Chapter 4, where that Chapter does not apply to an offshore fund by virtue of subsection (2A) of section 747B, then Chapter 2 and section 747A shall not apply in respect of that offshore fund.”.

(2) (a) Subject to paragraph (b), subsection (1) applies as respects income arising or gains accruing on or after 20 February 2007.

(b) Where on 20 February 2007 a person had a material interest in an offshore fund, which was an offshore fund to which Chapter 4 of Part 27 of the Principal Act applied before the passing of this Act, and that fund—

(i) is not an offshore fund to which Chapter 4 of Part 27 of the Principal Act applies after the passing of this Act, and

(ii) would not be a personal portfolio investment undertaking (within the meaning of section 739BA of the Principal Act) if it were deemed to be a fund to which that Chapter applied after the passing of this Act,

then subsection (1) does not apply to income arising and gains accruing in respect of the material interest which the person had on 20 February 2007.