469 Other unit trusts.U.K.
(1)This section applies to—
(a)M1any unit trust scheme [F1that is neither an authorised unit trust nor an umbrella scheme] ; F2. . .
(b)F3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
except where the trustees of the scheme are not resident in the United Kingdom.
(2)Income arising to the trustees of the scheme shall be regarded for the purposes of the Tax Acts as income of the trustees (and not as income of the unit holders) [F4and, in the case of income to which section 1A applies, chargeable to income tax at the basic rate, instead of at the [F5rate applicable in accordance with subsection (1A) of that section]]; and the trustees (and not the unit holders) shall be regarded as the persons to or on whom allowances or charges are to be made under the provisions of those Acts relating to relief for capital expenditure.
[F6(2A)Section 231(1) shall not apply where the recipient of the distribution there mentioned is the trustees of the scheme.
(2B)Section 233(1) shall not apply where the person there mentioned is the trustees of the scheme.]
(3)For the purposes of the Tax Acts the unit holders shall be treated as receiving annual payments (made by the trustees under deduction of tax) in proportion to their rights.
(4)The total amount of those annual payments in respect of any distribution period shall be the amount which, after deducting income tax at the basic rate in force for the year of assessment in which the payments are treated as made, is equal to the aggregate amount shown in the accounts of the scheme as income available for payment to unit holders or for investment.
(5)The date on which the annual payments are treated as made shall be the date or latest date provided by the terms of the scheme for any distribution in respect of the distribution period in question, except that, if—
(a)the date so provided is more than 12 months after the end of the period; or
(b)no date is so provided,
the date on which the payments are treated as made shall be the last day of the period.
[F8(5A)Subsection (5B) below applies where for any year of assessment—
(a)the trustees are (or, apart from this subsection, would be) chargeable under section 350 with tax on payments treated as made by them under subsection (3) above, and
(b)there is an uncredited surplus in the case of the scheme.
(5B)Where this subsection applies, the amount on which the trustees would otherwise be so chargeable shall be reduced—
(a)if the surplus is greater than that amount, to nil, or
(b)if it is not, by an amount equal to the surplus.
(5C)For the purposes of subsections (5A) and (5B) above whether there is an uncredited surplus for a year of assessment in the case of a scheme (and, if so, its amount) shall be ascertained by—
(a)determining, for each earlier year of assessment in which the income on which the trustees were chargeable to tax by virtue of subsection (2) above exceeded the amount treated by subsection (3) above as annual payments received by the unit holders, the amount of the excess,
(b)aggregating the amounts determined in the case of the scheme under paragraph (a) above, and
(c)deducting from that aggregate the total of any reductions made in the case of the scheme under subsection (5B) above for earlier years of assessment.
(5D)The references in subsection (5C)(a) above to subsections (2) and (3) above include references to subsections (2) and (3) of section 354A of the 1970 Act.]
(6)In this section “distribution period”[F9means a period beginning on or after 1st April 1987 over which income from the investments subject to the trusts is aggregated for the purposes of ascertaining the amount available for distribution to unit holders, but]—
(a)if the scheme does not make provision for distribution periods, then for the purposes of this section its distribution periods shall be taken to be successive periods of 12 months the first of which began with the day on which the scheme took effect; and
(b)if the scheme makes provision for distribution periods of more than 12 months, then for the purposes of this section each of those periods shall be taken to be divided into two (or more) distribution periods, the second succeeding the first after 12 months (and so on for any further periods).
[F10(6A)In this section “umbrella scheme” has the same meaning as in section 468.]
(7)In this section “unit trust scheme” has the same meaning as in the M2Financial Services Act 1986, except that the Treasury may by regulations provide that any scheme of a description specified in the regulations shall be treated as not being a unit trust scheme for the purposes of this section.
(8)Regulations under this section may contain such supplementary and transitional provisions as appear to the Treasury to be necessary or expedient.
(9)Sections 686 [F11, 686A] and 687 shall not apply to a scheme to which this section applies [F12except as respects income to which section 686 is treated as applying by virtue of paragraph 7 of Schedule 5AA.]
(10)Section 720(5) shall not apply in relation to profits or gains treated as received by the trustees of a scheme to which this section applies if or to the extent that those profits or gains represent accruals of interest (within the meaning of Chapter II of Part XVII) which are treated as income in the accounts of the scheme.
(11)This section shall have effect in relation to distribution periods beginning on or after 6th April 1987.
Textual Amendments
F1Words in s. 469(1)(a) substituted (with effect in accordance with s. 113(4)-(11) of the amending Act) by Finance Act 1994 (c. 9), s. 113(3)(a)
F2S. 469(1)(b) and preceding word repealed (with effect in accordance with Sch. 41 Pt. 5(1) Note 2 of the repealing Act) by Finance Act 1996 (c. 8), Sch. 41 Pt. 5(1)
F3S. 469(1)(b) and preceding word repealed (with effect in accordance with Sch. 41 Pt. 5(1) Note 2 of the repealing Act) by Finance Act 1996 (c. 8), Sch. 41 Pt. 5(1)
F4Words in s. 469(2) inserted (with effect in accordance with Sch. 6 para. 28 of the amending Act) by Finance Act 1996 (c. 8), Sch. 6 para. 12
F5Words in s. 469(2) substituted (with effect in accordance with Sch. 4 para. 12(5) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 12(2)
F6S. 469(2A)(2B) inserted (with effect in accordance with Sch. 4 para. 12(5) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 12(3)
F7Words in s. 469(3) repealed (with effect in accordance with Sch. 41 Pt. 5(1) Note 2 of the repealing Act) by Finance Act 1996 (c. 8), Sch. 41 Pt. 5(1)
F8S. 469(5A)-(5D) inserted by Finance Act 1988 (c. 39), s. 71
F9Words in s. 469(6) substituted (with effect in accordance with Sch. 14 para. 7 of the amending Act) by Finance Act 1994 (c. 9), Sch. 14 para. 5
F10S. 469(6A) inserted (with effect in accordance with s. s. 113(4)-(11) of the amending Act) by Finance Act 1994 (c. 9), s. 113(3)(b)
F11Words in s. 469(9) inserted (with effect in accordance with Sch. 4 para. 12(5) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 12(4)
F12Words in s. 469(9) inserted (with effect in accordance with s. 80(6) of the amending Act) by Finance Act 1997 (c. 16), s. 80(5)
Modifications etc. (not altering text)
C1S. 469 extended (27.7.1993) by 1993 c. 37, s. 12, Sch. 2 Pt. I para. 22(1)(2)
C2For regulations see Part III Vol. 5
Marginal Citations
M1Source—1970 s.354A; 1987 s.39; 1987 (No.2) s.40(1)