The Authorised Investment Funds (Tax) Regulations 2006

[F1 The genuine diversity of ownership condition U.K.

14C.— (1) The genuine diversity of ownership condition is that the qualified investor scheme must—

(a) meet Conditions A to D throughout the accounting period; or

(b) comply with paragraph (9).

(2) Condition A is that the scheme documents—

(a) contain a statement that units in the scheme will be widely available,

(b) specify the intended categories of investor, and

(c) specify that the manager of the scheme must market and make available the units in the scheme in accordance with condition C.

(3) Condition B is that neither—

(a) the specification of the intended categories of investor referred to in paragraph (2)(b), nor

(b) any other terms or conditions governing participation in the scheme, whether or not specified in the scheme documents,

have the effect of—

(i) limiting investors to a limited number of specific persons or specific groups of connected persons, or

(ii) deterring a reasonable investor within the intended categories of investor from investing in the scheme.

(4) Condition C is that units in the scheme must be marketed and made available—

(a) sufficiently widely to reach the intended categories of investors, and

(b) in a manner appropriate to attract those categories of investors.

(5) Condition C is subject to paragraph (8).

(6) Condition D is that a person who is within one of the categories of intended investor in the scheme which have been specified in accordance with condition A may, upon request to the manager of the scheme, obtain information about the scheme and acquire units in it.

(7) Condition D is subject to paragraph (8).

(8) Conditions C and D shall be treated as being met even if at the relevant time the scheme has no capacity to receive additional investments, unless—

(a) the capacity of the scheme to receive investments in it is fixed by the scheme documents (or otherwise); and

(b) a pre-determined number of specific persons or specific groups of connected persons make investments in the scheme which collectively exhausts all, or substantially all, of that capacity.

(9) The qualified investor scheme also meets the genuine diversity of ownership condition if—

(a) an investor in the scheme is a unit trust scheme (a “feeder fund”),

(b) paragraphs (2) to (8) are met in relation to the qualified investor scheme after taking into account the intended investors in the feeder fund, and

(c) the qualified investor scheme and the feeder fund have the same manager (or proposed manager).

(10) For the purposes of this regulation—

(a) sections 993 and 994 of ITA 2007 (connected persons) apply in the case of a person chargeable to income tax, and

(b) section 839 of ICTA (connected persons) applies in the case of a person chargeable to corporation tax.

(11) In this regulation “scheme documents” means—

(a) the instrument constituting the scheme, and

(b) the scheme’s prospectus in issue for the time being (including any supplements to the prospectus).]

Textual Amendments

F1 Pt. 2A inserted (1.1.2009) by The Authorised Investment Funds (Tax) (Amendment No. 3) Regulations 2008 (S.I. 2008/3159), regs. 1(1), 11 (with reg. 30)