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HMRC internal manual

Investment Funds Manual

Tax elected funds (TEFs): provisions for providing tax information to investors: alternative rules for providing tax information to investors

Introduction

Regulation 70 of SI2006/964 prescribes an alternative way in which a TEF can provide tax information to investors.

The optional, alternative provision allows a TEF to send to the investor less detailed information with the means to access more detailed information in another format.

Required information

Under regulation 70(4)(a) SI2006/964, the information that must be sent by post or electronically (subject to the conditions in IFM06420) to investors is as follows:

  1. the gross amount of the distribution made to the investor (including any amount accumulated to the investor);
  2. the number and class of units held by the investor in respect of which the distribution is made;
  3. the net amount of the distribution per unit (if a gross share class then the gross amount of the distribution per unit);
  4. Whether any tax has been deducted;
  5. The date the distribution was made; and
  6. The percentage of the gross distribution attributable to the TEF distribution (dividend) and the percentage attributable to the TEF distribution (non-dividend).

(The ‘gross amount’ of the distribution is the total of any dividend and non-dividend elements before any tax is deducted from the non-dividend element.)

Access to an electronic means of information

Where information is sent by the TEF to its investors, under regulation 70(4)(b) the TEF must provide a means of obtaining all the information required to complete a tax statement set out in section 1104 of the Corporation Tax Act 2010 (see IFM06420).

The regulation does not specify what kind of electronic means should be used. However, if investors can freely access information on a website and a web-based calculator, that would be sufficient provided they could establish the following information:

  • The amount of the dividend and or interest paid
  • (Up to 5 April 2017) The rate and the amount of any income tax deducted from the interest paid
  • (Up to 5 April 2017) The net amount of interest paid

Under regulation 70(4)(c) SI2006/964, the TEF must provide an alternative method of accessing information for investors who cannot access information electronically.