Taxes Consolidation Act 1997 section 743

Material interest in offshore funds

Section 743 defines what constitutes an "offshore fund" and a "material interest" in such a fund, and sets out the exclusions from the definition of material interest.

• An offshore fund is a non-resident company, a unit trust with non-resident trustees (subject to an exception for certain EU/EEA-branched authorised unit trusts administered in Ireland), or any arrangement under foreign law creating rights in the nature of co-ownership.
• An interest is a "material interest" if, at the time of acquisition, it could reasonably be expected that the investor would be able to realise the value of the interest within seven years — an objective test based on the proportion of the fund's net asset value represented by the interest.
• Interests arising from normal commercial bank lending or insurance policies are excluded, as are substantial trading shareholdings in overseas companies where the only expectation of realisation within seven years arose from a buy-out agreement or an agreement to wind up the company.
• An interest in a non-resident company is not a material interest where the holder has the right to wind up the company and would receive more than 50 per cent of the net assets on a winding up.