The Financial Services Act 1986 (Single Property Schemes) (Exemption) Regulations 1989

Requirements as to distribution of income

9.—(1) The terms of the scheme must provide that so much of the income of the scheme as is not reserved or expended as mentioned in paragraph (2) must not, without the consent of participants obtained in accordance with regulation 22(1)(b), be capable of being accumulated from year to year and each participant must, in the absence of such consent, be entitled to receive a sum which bears the same proportion to the sum calculated in accordance with paragraph (2) as:–

(a) in the case of a corporate based scheme, the number of shares in the operator held by the relevant participant bears to the number of shares comprised in the operator’s issued share capital; and

(b) in the case of a trust based scheme, the number of units held by the relevant participant on any date specified for this purpose in the trust deed bears to the total number of units in the scheme which are in issue on that date.

(2) The sum calculated in accordance with this paragraph is an amount representing the entire income received in respect of the property subject to the scheme by the trustee, in the case of a trust based scheme, or by the operator, in the case of a corporate based scheme, since the end of the period in respect of which income was last distributed, less any sum which has been reasonably reserved or expended for the purposes of or in connection with efficient estate management or has otherwise been reasonably reserved or expended for the purposes of or in connection with the proper management of the scheme in accordance with its objects.