The Open-ended Investment Companies (Tax) Regulations 1997

Explanatory Note

(This note is not part of the Regulations)

These Regulations make provision for the tax treatment under the Tax Acts and the Taxation of Chargeable Gains Act 1992 (c. 12) (“the 1992 Act”) of open-ended investment companies (within the meaning of the Financial Services Act 1986 (c. 60)) which are incorporated in the United Kingdom. The Regulations secure that the Tax Acts and the 1992 Act have effect in relation to open-ended investment companies in the same manner as the manner in which they have effect in relation to authorised unit trusts. The Regulations achieve this effect principally by making modifications to those enactments.

The Regulations are in a number of Parts, of which Part I (comprising regulations 1 and 2) is introductory.

Part II (regulations 3 to 8) makes general provision, including modifications extending generally to the Tax Acts and the 1992 Act, for the tax treatment of open-ended investment companies to equate with that of authorised unit trusts.

Part III (regulations 9 to 13) makes specific modifications to the provisions of the Income and Corporation Taxes Act 1988 relating to authorised unit trusts.

Part IV (regulations 14 to 19) makes specific modifications to other provisions of the Tax Acts.

Part V (regulations 20 to 23) makes specific modifications to the 1992 Act.

Part VI (regulations 24 to 28) contains miscellaneous provisions. Regulation 24 makes provision relating to classes of shares of open-ended investment companies. Regulations 25 to 27 provide for the tax treatment applicable in the case of a conversion of an authorised unit trust to an open-ended investment company, or the merger of an authorised unit trust with an open-ended investment company to form an open-ended investment company. Regulation 28 provides that the provisions of the Income Tax (Authorised Unit Trusts) (Interest Distributions) Regulations 1994 (S.I. 1994/2318) shall have effect in relation to open-ended investment companies as they have effect in relation to authorised unit trusts with the modifications specified.