Taxation of Chargeable Gains Act 1992 Schedule 7AD paragraph 7

Disposal of partnership asset giving rise to offshore income gain

Section 7 of Schedule 7AD deals with how offshore income gains arising from the disposal of partnership assets interact with the rules in this Schedule, ensuring that distributions from the partnership are adjusted to prevent double counting.

• The Schedule does not override or interfere with the Offshore Funds (Tax) Regulations 2009 made under section 354(1) of TIOPA 2010.
• Where a company accrues an offshore income gain from the disposal of a relevant partnership asset, any distribution it receives from the partnership representing the disposal proceeds is reduced accordingly.
• The reduction equals the whole of the offshore income gain if the distribution represents the full disposal proceeds, or a corresponding proportion if the distribution represents only part of them.
• This mechanism prevents the same economic gain from being taxed twice — once as an offshore income gain and again as part of a partnership distribution under this Schedule.