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14.—(1) This Chapter applies to offshore funds which are reporting funds at the date these Regulations come into force.
(2) In this Chapter a reference to regulation 53(1) or any sub-paragraph of that regulation is a reference to regulation 53(1) (contents of an application) of the principal Regulations as amended by regulation 6 of these Regulations.
(3) In this Chapter—
“HMRC” means Her Majesty’s Revenue and Customs;
“transitional fund” means a fund to which this Chapter applies.
15.—(1) The manager of a transitional fund must give the statements required by sub-paragraphs (h) to (l) of regulation 53(1) by a notice in writing to HMRC within one year of the date these Regulations come into force.
(2) A transitional fund will be treated as having operated equalisation arrangements, full equalisation arrangements or as not operating equalisation arrangements in accordance with those statements from the time that the fund first became a reporting fund for the purposes of any report made to participants after the date these Regulations come into force.
This is subject to regulation 16.
16.—(1) The amendments made by this Part shall not apply in relation to a reporting period which ended before the date these Regulations come into force if the manager of a transitional fund so elects by notice in writing given with the notice under regulation 15(1).
(2) If no notice is given under regulation 15(1) or if paragraph (3) applies, a transitional fund shall be treated as having given a statement under regulation 53(1)(k)(i) and be treated from the time that the fund first became a reporting fund as not operating equalisation arrangements and as intending to make adjustments on the basis of reported income.
(3) This paragraph applies if—
(a)a transitional fund has given a statement that it does not intend to operate equalisation arrangements and intends to make income adjustments on the basis of accounting income (see regulation 53(1)(l)), and
(b)HMRC do not consider that it is reasonable to expect that the difference between the amount of reported income per unit calculated using this method and the amount of reported income per unit calculated on the basis of reported income will be 10% or less of the latter of those amounts.
(4) Where paragraph (3) applies HMRC must give notice to the manager of the transitional fund within 28 days of receiving the notice under regulation 15(1).
(5) The notice under paragraph (4) must state that paragraph (2) of this regulation applies to the fund.
17.—(1) If HMRC give notice under regulation 16(4), the manager of the transitional fund may appeal.
(2) The notice of appeal must be given to HMRC within a period of 42 days beginning with the day on which the notice under regulation 16(4) is given.
(3) On an appeal, the tribunal may uphold or quash the notice.
(4) If the tribunal quashes the notice, this Chapter applies as if regulation 16(3) had never applied.
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