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HMRC internal manual

Company Taxation Manual

Authorised investment funds (AIFs): gross payment of interest distributions: residence condition: form R105(AIF)

Payment of interest distributions to non-resident participants without deduction of tax - SI2006/964 Regulation 30

A fund (the open-ended investment company or the trustees of the authorised unit trust) must (provided they have a valid declaration) pay interest distributions without deducting tax where the participants (beneficial owners of units/shares) are:

  • individuals who are not ordinarily resident in the UK, or
  • personal representatives of deceased not ordinarily resident individuals who held the units concerned immediately before their deaths, or
  • persons who satisfy the residence requirements in cases where the whole of an interest distribution is made to, or received under, a trust and is, or falls to be treated as, or is deemed to be, income of those persons and not the trustees of the trust, or
  • certain trusts where the trustees are not resident in the UK.

In each of these cases the unit holder(s) must have made a valid declaration (form R105 (AIF) or approved substitute), in the format specified for that purpose, that the residence requirement is satisfied. An exception is where a unit holder is the personal representative of a deceased unit holder who had made a valid not ordinarily resident declaration that was still valid at the time of his death.

The form for declaration of non-residence can be found on the HMRC website (). Fund administrators may use their own version of the form if the form has been approved by HMRC prior to use (CTM48665).