Tax elected funds (TEFs): introduction & conditions of membership for the TEF regime: overview of conditions of membership
Entry into the Tax Elected Fund (TEF) regime is subject to HMRC approval. The manager of the fund, or proposed manager for a newly formed fund, must make an application in writing to HMRC that it wants the TEF rules to apply from a given date. The fund must be an open-ended investment company (OEIC) or an authorised unit trust (AUT) (see CTM48110) and meet the following conditions:
- the property condition (CTM48913);
- the genuine diversity of ownership (GDO) condition (CTM48914);
- the loan creditor condition (CTM48915); and,
- the scheme documentation condition (CTM48916).
An application for the TEF regime will apply from the beginning of an Accounting Period (AP) for an existing and newly formed fund - see CTM48923 for precise details. The term AP, for the purposes of this guidance, is as defined in CTA 2009/S9.