FUNDAMENTAL changes to the offshore funds regime come into force in less than six weeks.

It follows more than two years of consultation by HMRC and the UK Government after the announcement in the 2007 Budget of the reform of the regime to address tax barriers.

HMRC’s aims include simplifying the regime, providing more certainty to UK investors and funds and strengthening anti-avoidance rules so that UK investors who choose to invest into offshore funds do so based on commercial decisions and not to obtain any intended tax advantage.

The new regulations will also replace the concept of UK distributor status with reporting fund status.

Dominic Rigby (pictured), senior manager of Ernst & Young’s Channel Islands tax team, said the changes aimed to bring about a ‘catch-all situation’.

‘It’s trying to align the treatment of UK investors who invest in offshore funds to those who have invested in onshore funds. The aim is to bring parity and to take away the perceived advantages of investing in offshore arrangements.

‘It’s less than six weeks until the new regulations come into effect and administrators and fund managers really need to be looking at these and how they will be affected, as there’s a lot to take on board in terms of very detailed regulations.’

Alongside tax director Neil Oliver, Mr Rigby was speaking to more than 100 delegates at an Ernst & Young breakfast seminar this week about the latest developments.