Ria Dhillon, tax adviser at Croner-i, explains the tax position on offsetting losses against gains and the importance of defining the fund
My personal tax client has disposed of units in both an offshore non-reporting fund and a reporting fund and has made a gain on both. In the same year, they have disposed of another offshore non-reporting fund and made a loss. Is it possible to offset the loss against the gains to reduce the tax payable?
Offshore funds are defined in the legislation at TIOPA 2010 s354-s363 with the secondary legislation fund in the Offshore Funds (Tax) Regulations 2009 (SI 2009/3001).
Offshore funds are either a reporting fund or non-reporting fund. It is always important to establish which type of fund it is as both have different tax treatments on disposals of units in the fund.
