Fairer tax regime in pipeline for offshore Fofs

recent consultation suggests better taxation system for multi-tiered vehicles that are currently penalised under an archaic offshore regime

Offshore funds of funds could receive fairer tax treatment depending on the outcome of an ongoing consultation. Under the current regime, multi-tiered vehicles such as funds of funds are penalised because certain offshore vehicles do not qualify for CGT taper relief. This was not a result of the Government actively penalising the funds, but a by-product of its aim back in the mid-1980s to stop investors using offshore vehicles to reduce their tax burden by converting income into capital gains. In the pre-Budget report last December, the Treasury announced it would be holding a consultati...