Taxes Consolidation Act 1997 section 745

Charge to income tax or corporation tax of offshore income gain

Section 745 provides that offshore income gains arising on the disposal of a material interest in an offshore fund are charged to tax as income under Schedule D Case IV, and sets out the residence, remittance, charity, and trust rules governing that charge.

• An offshore income gain (calculated under Schedule 20) is treated as income of the person making the disposal, chargeable under Case IV of Schedule D for the chargeable period in which the disposal occurs.
• Capital gains tax residence and branch/agency rules are applied to determine liability, so that non-residents are generally not chargeable unless trading in the State through a branch or agency; non-domiciled individuals resident in the State are taxed only on gains remitted to the State.
• Charities are exempt from tax on offshore income gains provided the gains are applied for charitable purposes; if trust property representing such a gain ceases to be held for charitable purposes, a deemed disposal and reacquisition at market value triggers a taxable offshore income gain.
• No offshore income gain arises on a disposal of settled property where the general administration of the trust is ordinarily carried on outside the State and the trustees (or a majority of them) are neither resident nor ordinarily resident in the State.