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HMRC internal manual

Company Taxation Manual

From
HM Revenue & Customs
Updated
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Authorised investment funds (AIFs): taxation of funds: distributions

The making of a distribution by an authorised investment fund (AIF) to a unit holder includes investing an amount on behalf of the unit holder in respect of accumulation units held by him.

The amount of any distribution from an AIF is shown in the distribution accounts (CTM48415).

It is not necessary for the distribution accounts to be audited.

Types of distribution - SI2006/964 Regulation 17

The total amount appearing in the distribution accounts of the AIF must be shown as available for distribution in one of the following ways:

  • as a dividend distribution (CTM48260),
  • as available for distribution as yearly interest (an interest distribution) (CTM48265 - CTM48275).

An interest distribution may not be paid with a dividend distribution. Note that the two types of distribution are treated in the AIF differently for tax purposes - as set out in the pages referred to above.

Amount and date of distribution - SI2006/964 Regulations 18 and 22

The AIF is deemed to have made a payment of the total amount shown as available for distribution either as yearly interest or as a dividend distribution, as the case may be, to unit holders in proportion to their rights and on the distribution date (CTM48415).