The Authorised Investment Funds (Tax) Regulations 2006

[F1Distribution payments to be made without deduction of taxU.K.
This section has no associated Explanatory Memorandum

69Z24.—(1) [F2Subject to paragraphs (3A) and (3B),] on making a distribution, an open-ended investment company to which this Part applies must not deduct any sum representing income tax if the company reasonably believes that conditions A and B are met.

(2) Condition A is that if the distribution were made by a UK-REIT out of the profits of C (tax-exempt), the distribution would be required to be made without any deduction representing income tax.

(3) Condition B is that if the distribution were a distribution of yearly interest, the distribution would be required to be made without any deduction representing income tax.

[F3(3A) But neither condition A nor condition B is met, in relation to a unit trust scheme, where—

(a)the distribution is made to the trustee of the scheme;

(b)the trustee is chargeable to corporation tax or income tax on the distribution in the United Kingdom; and

(c)the trustee has made a request in writing to the Property AIF that the Property AIF should deduct tax from the distribution.

(3B) The Property AIF must not specify that the trustee of any unit trust scheme seeking to acquire shares in the Property AIF must have tax deducted from any distribution.]

(4) If at the time it makes a distribution the company reasonably believes that conditions A and B are met, but in fact those conditions are not both met, these Regulations shall apply to the distribution as if it were never one which could be made without deduction of tax.

(5) In paragraph (2) “profits of C (tax-exempt)” shall be construed in accordance with Part 4 of FA 2006.]

Textual Amendments