Tax elected funds (TEFs): application process and effects of entry to the TEF regime: HMRC refusal notice
When will a refusal notice be issued?
Where a TEF application fails to show that the fund or (proposed fund) will meet any of the conditions set out below then the application will be refused in accordance with regulation 69Z52 SI2006/964 (unless a minor error or omission has occurred - see CTM48923). If a refusal notice is issued, HMRC will set out the reasons for doing so, in writing.
The documents supplied with the application do not demonstrate that the TEF will meet the conditions of entry (set out in CTM48913 to CTM48916) or the statements supplied by the manager or proposed manager do not demonstrate that the fund or proposed fund can have a reasonable expectation that it will meet the conditions of entry.
The application is not accompanied by the necessary documents and statements set out in CTM48924.
Any necessary shareholder, unit holder or regulatory authorisation or approval by the FSA has not been given.
Re-applications following the issue of a refusal notice
If a refusal notice is issued, the manager or proposed manager can re- submit the application as soon as the required amendments have been made and this will be treated as a new application.
Appeal against a refusal notice
Where a refusal notice is issued, the fund manager or proposed fund manager has the right to appeal against the notice to the first tier tribunal, on behalf of the fund or proposed fund in accordance with regulation 69Z53 SI2006/964. The notice of appeal must be submitted to HMRC within 28 days of the date when the refusal notice is given.
If an appeal is notified to the tribunal, the tribunal will determine whether the issue of the refusal notice was correct and reasonable. If the tribunal allows the appeal, it may direct the TEF regime to apply and specify the date from which it should commence. (The tribunal cannot specify a commencement date earlier than the beginning of the specified date that an existing fund applied for, or the date of FSA authorisation where a future fund application was submitted.)