Taxes Consolidation Act 1997 section 744

Non-qualifying offshore funds

Section 744 sets out the conditions under which an offshore fund may be certified by Revenue as a distributing fund and defines the account periods to which certification relates.

• An offshore fund is automatically a non-qualifying fund unless Revenue certify it as a distributing fund for a particular account period; to be certified, the fund must distribute at least 85% of its income for that period.
• A fund cannot be certified as a distributing fund if more than 5% of its assets are in other offshore funds, more than 10% are in a single company, or it holds more than 10% of the issued share capital of any company.
• Where a fund has more than one class of interest, each class must receive proper distribution benefits; this is tested by treating each class as a separate sub-fund and applying the 85% distribution test to each.
• An account period of an offshore fund generally runs for up to 12 months and ends on the earlier of the fund's accounting date, the expiry of 12 months, or the fund ceasing its activities; it also ends if the fund becomes Irish-resident.