Excess Reportable Income - income vs capital gains

[TeenageGrandad]

Hi

I am considering investment into an offshore reporting fund that accumulates its income. I understand that, if you hold such a fund on the last day of its reporting period, you have to declare income as per the "excess reportable income" rules and calculations. This is so even if it was bought e.g. only a day before that last day of the reporting period. But I wondered what would happen if you sold a holding before the last day of the reporting period, and bought it back again afterwards, thus avoiding ownership on the key last day? Would that not just crystallise a capital gain (or loss) and avoid the accumulated gains being taxed as income?

Would it not be possible to do this year after year, just rinse and repeat to turn income into capital gains?

I am aware that there is a "30 day" rule for identifying sales with purchases, such that 30 days would have to elapse between the sale and the purchase for this to work, so you would have to be 'out of the market' for about a month. But other than that wrinkle, have I understood the tax rules correctly?

And what would happen if there were two offshore reporting funds - let's call them A and B - from differing providers that invested in very similar portfolios but with the same reporting date. Could you not just invest in fund A, sell it 1 day before the reporting date, then invest in fund B 1 day after the reporting date? Would this not still tranform income to capital gains but mean you are only 'out of the market' for a day or two? (And you could repeat the following year - sell fund B to buy fund A).

Any thoughts on this most welcome.

Many thanks,
TG