Taxation in the UK

Below you find information about the UK taxation of your investments in Jyske Invest International. When you are fully liable to pay tax to the UK – rather than Denmark – your investments in Jyske Invest International will NOT be taxed in Denmark.

Jyske Invest International, Conversion of sub-funds to UK reporting funds tax status from 1 January 2013.

General information

The following taxation commentary and accompanying information is general in nature and does not constitute taxation advice, nor will it necessarily be appropriate or relevant for certain types of investor, such as companies and financial traders, or where sub-funds constitute bond funds.  All investors and prospective investors should seek independent professional advice in relation to their tax position since this will ultimately depend on their particular tax status and circumstances.

Background information

The UK’s ‘offshore fund’ regime was introduced in response to what HM Revenue & Customs, the UK tax authorities (HMRC), perceived to be the potential for avoidance of UK tax by UK investors through the use of non-UK funds to roll up investment income.  In the absence of the offshore funds legislation, investors might be able to convert income receipts into capital, which could then be subject to a lower overall rate of tax.  For example, a UK individual would currently pay capital gains tax at a top rate of 28%, compared to UK income tax at a top rate of 45%.

To eliminate this perceived avoidance, the offshore funds legislation provides that, unless the shares which a UK investor holds are designated as a UK ‘reporting fund’ by HMRC, any gains arising to the investor on a disposal of their shares in the offshore fund are subject to tax as income.

Conversely, a person can generally benefit from capital tax treatment on the disposal of an interest in a UK reporting fund.  However, the investor will be deemed to receive an appropriate share of the income earned by the reporting fund each year, irrespective of whether that income is actually distributed by the fund to the investor.

Special tax rules will apply where the shares convert to a reporting fund during the investor’s ownership period. In this case, investors may be able to make a tax election to secure capital treatment on a disposal of their shares.  The election would, however, trigger taxable offshore income gains at the date of conversion of the offshore fund to reporting fund status.

Tax implications for UK investors in Jyske Invest sub-funds

Jyske Invest has applied for and has received HMRC’s approval for all of its sub-funds to be designated as UK reporting funds with effect from 1 January 2013.

The accompanying flowchart summarises the likely tax impact for UK investors that hold (or have held) interests in these Jyske Invest sub-funds as a consequence of securing UK reporting fund status.

Investors holding shares in these sub-funds should obtain and review the yearly reporting fund information posted on the Jyske Invest website and include relevant details on their UK tax returns, as appropriate.

Frequently asked questions