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HMRC internal manual

Company Taxation Manual

Authorised investment funds (AIFs): gross payment of interest distributions: reputable intermediary condition - reasonable belief - examples

The following examples may help to illustrate some of the circumstances in which interest distributions might be paid without deduction of tax on the grounds of reasonable belief.

  • The intermediary has made to the fund (to the trustees of authorised unit trust or to the open-ended investment company), a composite declaration that it holds the full names and addresses of all the persons for whom they are receiving interest distributions and that all are not ordinarily resident in the UK.
  • The intermediary maintains and is able to provide a list of the names and principal addresses of the non-resident unit holders entitled to the interest distributions. The intermediary also has appropriate procedures in place to identify changes and eliminate unit holders who would no longer qualify for payment without deduction.
  • The terms of the business between the fund and the intermediary require the intermediary to only place units with unit holders who can satisfy the not-resident in the UK requirement for payment without deduction and the intermediary can provide factual evidence that this is the case.
  • The fund has a class of units, in respect of which interest distributions are to be made, that can only be marketed to persons who are not resident or not ordinarily resident in the UK and has or can obtain and provide factual evidence that this is the case.