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HMRC internal manual

Company Taxation Manual

Tax elected funds (TEFs): breaches of conditions: information requirements

If HMRC has reason to believe that a TEF does not meet or may not meet any of the conditions of the regime or has not rectified a breach then an officer of HMRC may request any of the information shown below in the form of an information notice. If an information notice is issued to the manager of fund, the manager must respond to the information notice within 28 days of the date the notice was served (the specified period). (See regulation 69Z69 SI2006/964.)

What information may be requested under an information notice?

An information notice may seek to obtain any of the following information from the manager of a fund:

  • the date on which a condition first ceased to be met;
  • the date on which the AIF became aware of the breach;
  • details of the condition that was breached;
  • the reason for the breach;
  • the steps the AIF proposes to take to rectify the breach;
  • the date when the breach was rectified or by which the AIF proposes to rectify it;
  • details of any previous breaches of conditions, stating which condition was breached, the date of the breach and when it was rectified.

Consequences of not complying with an information notice

If the manager of the fund does not provide HMRC with the information requested in the information notice within the specified period of 28 days then a termination notice will be issued by HMRC.

If there are good reasons why the specified period cannot be met, then the manager of the fund can make an application to HMRC for this to be extended by a reasonable amount of time, which will need approval from HMRC.