IFM06250 - 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 the conditions set out below then the application will be refused in accordance with regulation 69Z52 of SI2006/964 (unless a minor error or omission has occurred - see IFM06230). If a refusal notice is issued HMRC will set out the reasons in writing.

Condition A

The documents supplied with the application do not demonstrate that the TEF will meet the conditions of entry (see IFM06130 to IFM06160) 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.

Condition B

The application is not accompanied by the necessary documents and statements set out in IFM06240.

Condition C

Any necessary authorisation or approval by investors or the Financial Conduct Authority (FCA) 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 of SI2006/964.

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.