PART 2THE TAX TREATMENT OF AUTHORISED INVESTMENT FUNDS
F2Authorised investment funds having interests in offshore non-reporting funds
F1Authorised investment funds with limited investment powers – stamp duty reserve tax14A
1
Where, for the relevant period—
a
an authorised investment fund is constituted as a unit trust scheme (“the scheme”); and
b
conditions A to D in this regulation are met,
paragraph 2 of Schedule 19 to the Finance Act 1999 (“FA 1999”) shall not apply to a surrender to the scheme that would, but for this regulation, be taxable under Part II of that Schedule.
2
Condition A is that the scheme must be dedicated to investment in the shares of a specified open-ended investment company to which Part 4A applies (“the PAIF”).
3
Condition B is that—
a
the trust deed of the scheme must specify that the scheme may only invest in the PAIF; and
b
the prospectus for the scheme must state that the scheme may only invest in the PAIF.
4
Condition C is when an investment in the scheme is made, the scheme must (within one working day of that investment) invest in the PAIF an amount equal to the investment.
5
Condition D is that when a withdrawal of investment from the scheme is made, the scheme must (within one working day of that withdrawal) withdraw from the PAIF an amount equal to the withdrawal.
6
For the purposes of complying with conditions C and D, an investment in the scheme may not be set off against a withdrawal from the scheme.
7
A scheme will not be dedicated to investment in the PAIF for the purpose of condition B if it has any assets other than shares in the PAIF and money.
8
In this regulation—
“relevant period” means the relevant two-week period referred to in paragraph 4(2) of Schedule 19 to FA 1999.
“surrender” means a surrender within the meaning of paragraph 2 of Schedule 19 to FA 1999.
“working day” means a day other than—
- a
a Saturday, Sunday, Christmas Day or Good Friday; or
- b
a Bank Holiday in the United Kingdom under the Banking and Financial Dealings Act 1971.
- a
“money” includes cash held on deposit but does not include securities of any kind.
Regs. 14ZA-14ZC and cross-heading inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Authorised Investment Funds (Tax) (Amendment) Regulations 2011 (S.I. 2011/244), regs. 1(1), 4 (with reg. 8)