Finance (No. 2) Act 1997

29 Unauthorised unit trusts

(1) Where a qualifying distribution—

(a) is made on or after 2nd July 1997 but before 6th April 1999 by a company resident in the United Kingdom, and

(b) falls to be regarded by virtue of subsection (2) of section 469 of the Taxes Act 1988 (unit trusts other than authorised unit trusts) as income of the trustees of a unit trust scheme to which that section applies, and

(c) is not a foreign income dividend and does not fall to be regarded by virtue of any provision of the Tax Acts apart from this section as a foreign income dividend arising to the trustees,

the trustees shall be treated for all purposes of the Tax Acts (apart from this section) as if the qualifying distribution were a foreign income dividend.

(2) Subsection (1) above shall not apply—

(a) if the unit trust scheme is a common investment fund established under section 42 of the [1982 c. 53.] Administration of Justice Act 1982; or

(b) if, apart from section 469(2) of the Taxes Act 1988, the whole of the qualifying distribution would fall to be regarded as income of section 505 bodies.

(3) In this section—

• “foreign income dividend” shall be construed in accordance with Chapter VA of Part VI of the Taxes Act 1988;

• “section 505 body” means—

  (a)

  a charity, as defined in section 506(1) of the Taxes Act 1988;

  (b)

  a body mentioned in section 507 of that Act (heritage bodies); or

  (c)

  an Association of a description specified in section 508 of that Act (scientific research organisations).