The Authorised Investment Funds (Tax) Regulations 2006

PART 1PRELIMINARY PROVISIONS AND INTERPRETATION

Preliminary provisions

1Citation, commencement and effect

2Structure of these Regulations

3Definition of “authorised investment funds”

4Definition of “open-ended investment company”

5Interpretation of expressions relating to authorised unit trust schemes

6Further definitions generally relevant for authorised investment funds

7Umbrella companies and umbrella schemes: interpretation

8General interpretation

9Abbreviations and general index

PART 2THE TAX TREATMENT OF AUTHORISED INVESTMENT FUNDS

Loan relationships and derivative contracts: exclusion of capital profits, gains or losses

10General rule for loan relationships: exclusion of capital profits, gains or losses

11General rule for derivative contracts: exclusion of capital profits, gains or losses

12Accounts prepared in accordance with UK generally accepted accounting practice

Loan relationships: treatment of interest distributions and deficits

13Treatment of interest distributions for purposes of loan relationships

14Treatment of deficits on loan relationships

PART 3DISTRIBUTIONS MADE BY AUTHORISED INVESTMENT FUNDS

15Interpretation

16Funds excluded from the ambit of this Part

Distribution accounts: general

17Contents of distribution accounts

Interest distributions

18Interest distributions: general

19The qualifying investments test

20Meaning of “qualifying investments”

21Meaning of “qualifying investments”: further provisions

Dividend distributions

22Dividend distributions: general

De minimis amounts

23Provisions applying if amounts available for distribution are de minimis

PART 4THE TREATMENT OF PARTICIPANTS IN AUTHORISED INVESTMENT FUNDS

CHAPTER 1PRELIMINARY PROVISIONS

24Structure of this Part

25Funds excluded from the ambit of this Part

CHAPTER 2PARTICIPANTS CHARGEABLE TO INCOME TAX

Deduction of tax from interest distributions: general

26Deduction of tax where interest distributions made

The reputable intermediary condition

27The reputable intermediary condition

28The reputable intermediary condition: further provisions

29Consequences of reasonable but incorrect belief

The residence condition

30The residence condition

31Residence declarations

32References to beneficiaries in regulations 30 and 31

33Interest distributions: the position of the legal owner

The non-liability condition

34The non-liability condition

35Qualifying certificates

36The contents condition

37The supplier condition

38The time limit condition

39The continuing validity condition

40The qualifying circumstances condition

41The joint holding condition

42Qualifying certificates valid for only part of jointly held accounts: introductory

43Qualifying certificates valid for only part of jointly held accounts: the general rule

44Qualifying certificates valid for only part of jointly held accounts: further provisions

45Consequences of notice under regulation 39(6)

46Qualifying certificate not in writing

CHAPTER 3PARTICIPANTS CHARGEABLE TO CORPORATION TAX

Interest distributions

47The obligation to deduct tax

Dividend distributions

49Calculation of unfranked part of dividend distribution

50References to gross income

51Cases where participant is the manager of the fund

52Repayments of tax

52ABanks and other financial traders: treatment of certain amounts of tax as foreign tax

CHAPTER 4CHARGE TO TAX ON SUBSTANTIAL QIS HOLDINGS IN QUALIFIED INVESTOR SCHEMES

53Charge to tax under this Chapter

54Meaning of “substantial QIS holding”

55Amount charged to tax under this Chapter

56Measuring dates and meaning of “chargeable measuring date”

57How tax is charged under this Chapter: income tax

58How tax is charged under this Chapter: corporation tax

59Further provisions

The first measuring date

60The general rule

61Cases affected by the coming into force of these Regulations

62Cases involving the launch of qualified investor schemes

63Cases where a participant's holding becomes substantial

64Definition of the “first measuring date”

65Calculation to be made on the first measuring date

Disposals of holdings

66Reorganisations etc.

67Disposal of part of a substantial QIS holding

68Disposal of the whole of a substantial QIS holding

69No gain/no loss disposals

PART 5COMPLIANCE

Information relating to distributions

70Application of section 234A of ICTA

Interest distributions

71Notification of interest distributions made without deduction of tax

72Information about interest distributions made without deduction of tax

73Inspection of records

74Use of information

Residence declarations

75Inspection of residence declarations

PART 6FURTHER PROVISIONS RELATING TO AUTHORISED INVESTMENT FUNDS

CHAPTER 1GENERAL

76Ownership of shares of different denominations in open-ended investment companies

77Non-discrimination in respect of different classes of shares

CHAPTER 2AMALGAMATION OF AN AUTHORISED UNIT TRUST WITH, AND CONVERSION OF AN AUTHORISED UNIT TRUST TO, AN OPEN-ENDED INVESTMENT COMPANY

78Circumstances in which this Chapter applies

79Ending of accounting period of the target trust

80Carrying forward of excess management expenses

81Distributions by authorised unit trust after the end of its pre-transfer accounting period

82Continuing validity of residence declarations

83Powers of the acquiring company

84Assessments made on discovery

85Prevention of double relief

PART 7CONSEQUENTIAL AMENDMENTS AND MODIFICATIONS OF ENACTMENTS

CHAPTER 1AMENDMENTS OF REFERENCES TO REPEALED ENACTMENTS

87Amendments of TMA 1970

88Amendment of ICTA

89Amendment of TCGA 1992

90Amendment of FA 1996

91Amendments of ITTOIA 2005

92Amendment of the Finance Act 2005

CHAPTER 2MODIFICATIONS OF THE TAX ACTS

93AModifications of TMA 1970

94Modifications of ICTA

95Modifications of FA 1996

96Modifications of ITTOIA 2005

CHAPTER 3MODIFICATIONS OF TCGA 1992

98Application of TCGA 1992: general

General modifications of TCGA 1992

99General modifications: introduction

100General modification: authorised unit trust

101General modification: manager of authorised unit trust

102General modification: unit in authorised unit trust

103General modification: accumulation units in authorised unit trusts

104General modification: holder of unit in authorised unit trust

Specific modifications of TCGA 1992

105Modification of section 99 of TCGA 1992

106Insertion of section 99AA of TCGA 1992

107Modification of section 170 of TCGA 1992

108Modifications of section 272 of TCGA 1992

109Modifications of section 288 of TCGA 1992

110Modification of Schedule A1 to TCGA 1992

PART 8FINAL PROVISIONS

111Instruments revoked

SCHEDULEAbbreviations and Defined Expressions

PART 1Abbreviations of Acts

PART 2Index of expressions defined or otherwise explained in these Regulations

2006 No. 964

INCOME TAX

CORPORATION TAX

CAPITAL GAINS TAX

The Authorised Investment Funds (Tax) Regulations 2006

Made29th March 2006

Coming into force1st April 2006

The Treasury, in exercise of the powers conferred upon them by sections 17(3) and 18 of the Finance (No. 2) Act 2005 M1 and section 152 of the Finance Act 1995 M2 make the following Regulations:

Annotations:

Marginal Citations

M1

M2

1995 c. 4; section 152 was amended by paragraph 13 of Schedule 19 to the Finance Act 1999 (c. 16) and Article 90 of S.I. 2001/3629.