HMRC has published a consultation document on proposals to widen the scope of section 363A Taxation (International and Other Provisions) Act 2010 ('TIOPA') so as to included entitites that are non-UCITS funds within the definition of an offshore fund.

Section 363A TIOPA treats certain offshore funds as not resident in the UK if they are resident under the law of a Member State. It applies to offshore funds which are, for the purposes of the Undertakings for Collective Investment in Transferable Securities (UCITs) IV Directive, undertakings for collective investment in transferable securities, and are authorised (pursuant to Article 5 of the UCITS Directive) in a member state other than the United Kingdom.

The government announced at Budget 2013 that it would consult on proposals to widen the scope of section 363A to provide certainty that locating the management of certain offshore non-UCITS funds in the UK will not lead to a risk of such funds being treated as tax resident.

The proposal is to extend section 363A to include those entities that are non-UCITS funds which are within the definition of an offshore fund for UK tax purposes and which have a UK-based manager that is either an AIF manager ('AIFM') authorised by the FCA or a branch of an AIFM authorised in another member dtate.

HMRC expects comment by 14 October 2013

Legislation will be introduced in Finance Bill 2014.

More details are available from Gov.uk HERE