RegulationMay 30 2013

Tax withheld on rebates to offshore investors

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ByEmma Ann Hughes

The government has amended the Authorised Investment Funds (Tax) Regulations 2006 and also The Offshore Funds (Tax) Regulations 2009.

Amendments set out by HMRC will remove the duty to withhold tax from rebates of the annual management charge in most cases where these payments are made to investors who are not UK resident for tax purposes.

The two statutory instruments (covering non-resident investors in UK authorised investment funds and non-resident investors in offshore funds) will remove most obligations on UK payers to deduct basic rate income tax before making or passing on payments to investors in connection with any management charges paid by the fund to its manager.

Following a four week consultation period, the government expects to lay the regulations, setting out the detailed rules, subject to the usual parliamentary process.

The regulations relating to investors in authorised investment funds will come into force 21 days after they are made.

The regulations relating to investors in offshore funds will be in force retrospectively from 6 April 2013.

The deadline for comments on is 25 June 2013.

Comments should be emailed to