In the case of a reporting fund which is not a transparent fund, the Tax Acts have effect as if the excess (if any) of the reported income of the fund in respect of a reporting period over the distributions made by the fund in respect of the reporting period were additional distributions made to the participants in the fund in proportion to their rights.

In the case of a reporting fund which is a transparent fund, the Tax Acts have effect as if the excess (if any) of the reported income of the fund in respect of a reporting period over the income of the fund for the reporting period were additional income of the participants in the fund in proportion to their rights.

But to the extent that the participant’s rights in the fund are rights to which regulation 30 (rights in certain existing holdings) applies, the excess specified in F3paragraphs (1) and (2) shall be reduced proportionately.

The excess specified in paragraphs (1) and (2) is treated as made, on the fund distribution date, F4or on such earlier date as the reported income in respect of that reporting period is recognised in the participant’s accounts, to participants holding an interest in the fund at the end of the reporting period.

In these Regulations the “fund distribution date” for a reporting period of a reporting fund F5means the date six months following the last day of the reporting period.