Taxes Consolidation Act 1997 section 740

Interpretation (Chapter 2 and Schedules 19 and 20)

Section 740 provides an index of defined terms used throughout the offshore funds legislation in Chapter 1 and in Schedules 19 and 20.

• Section 740 lists key terms used in the offshore funds provisions and directs the reader to where each term is defined or explained elsewhere in the legislation.
• The offshore funds regime was introduced to prevent investors from using funds based outside the State to convert what was effectively income into more lightly taxed capital gains.
• Before 6 April 1990, offshore funds could accumulate ("roll up") income free of tax, allowing investors to take a capital return — taxed at lower capital gains tax rates — instead of receiving income distributions taxed at higher income tax rates.
• The legislation counters this by treating the unindexed capital gain on disposal of an interest in an offshore fund as income rather than as a capital gain.