Taxes Consolidation Act 1997 Schedule 20 paragraph 5

The offshore income gain

Paragraph 5 of Schedule 20 explains how the offshore income gain arising on a material disposal of an interest in a non-qualifying offshore fund is calculated.

• The offshore income gain on a material disposal is equal to the unindexed gain — that is, the gain calculated without any indexation allowance.
• Where the material interest was acquired before 6 April 1990 and the gain since that date is less than the full unindexed gain, the offshore income gain is limited to the gain arising since 6 April 1990.
• In either case, no indexation allowance is available to reduce the offshore income gain.
• The rule ensures that gains accruing before 6 April 1990 are not charged as offshore income gains where the interest was held prior to that date.