Where the disposal of an interest in an offshore fund gives rise to an offshore income gain, it is also likely to give rise to a chargeable gain. To prevent against double taxation, the basic rule is that the offshore income gain is deducted from the disposal value of the interest in calculating the capital gain (the Offshore Funds (Tax) Regulations 2009 (SI 2009/3001), reg. 45). This is subject to some modifications, as follows (reg. 45–47):

(1)where there is a part-disposal, the offshore income gain is not to be deducted from the disposal consideration to be taken into account for the purposes of the calculation at TCGA 1992, s. 42 (see ¶520-050);

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