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HMRC internal manual

Company Taxation Manual

From
HM Revenue & Customs
Updated
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AIFs: Property authorised investment funds (Property AIFs): breaches of conditions: breach of the loan creditor condition

See also the information requirements at CTM48877.

Consequences of breaches of the loan creditor condition

Under regulation 69Z6 SI 2006/964 if the Property AIF inadvertently breaches this condition (set out in regulation 69M SI 2006/964 – see CTM48818) but rectifies this within 28 days of discovering the breach no further action will be taken by HMRC.

However, HMRC will issue a termination notice in the following circumstances:

  • if the manager does not rectify the inadvertent breach within 28 days of first becoming aware of the breach,
  • if the Property AIF is in breach of this condition through the negligent or intentional actions of the manager,
  • if there are two breaches of the same condition A, B or C in paragraphs (2) to (5) of the loan creditor condition (regulation 69M SI 2006/964) in three different accounting periods within a 10 year period, beginning on the first day of the accounting period in which the manager becomes aware of the first breach, or
  • if there are three breaches of any of the conditions A, B or C set out in paragraphs (2) to (5) of the loan creditor condition (regulation 69M SI 2006/964) in three different accounting periods within a 10 year period, beginning on the first day of the accounting period in which the manager becomes aware of the first breach.