The Authorised Investment Funds (Tax) (Amendment) Regulations 2021

EXPLANATORY NOTE

(This note is not part of the Regulations)

These Regulations amend the Authorised Investment Funds (Tax) Regulations 2006 (“the principal Regulations”) to make provision for the tax treatment of a new type of authorised investment fund called a long-term asset fund and make provision in relation to the application of Part 3A of the Corporation Tax Act 2010 (“CTA 2010”) to qualified investor schemes.

Regulation 1 provides for citation and commencement.

Regulation 2 introduces the amendments.

Regulation 3 makes amendments in relation to long-term asset funds. Paragraph (1) amends the genuine diversity of ownership condition in regulation 9A of the principal Regulations to treat that condition as being satisfied if the fund published its prospectus before these Regulations come into force on 9th December 2021 or if at least 70% of the units in the fund are held by specified investors. Paragraph (2) inserts new Part 2AA into the principal Regulations, which includes the definition of a long-term asset fund and sets out the consequences if the fund does not meet the genuine diversity of ownership condition. Paragraphs (3) to (5) make consequential amendments.

Regulation 4 omits a repealed provision and disapplies Part 3A of CTA 2010 (companies with small profits) to a qualified investor scheme that does not meet the genuine diversity of ownership scheme.

A Tax Information and Impact Note has not been prepared for this instrument as it contains no substantive changes to tax policy.