Treasury flexible over offshore rules

The UK Government has indicated it will remove the controversial taxation proposals in its overhaul of the offshore funds regime, which were expected to negatively affect hedge funds. Earlier this year, the Inland Revenue proposed to implement taxation changes in the offshore funds market. The proposals for mark- to-market taxation caused concern as they would have seen UK investors in hedge funds paying income tax on an annual basis, rather than allowing them to defer tax payments. In a further consultation paper released on 27 November, the HM Treasury said it had received a num...