IFM08110 - Introduction

What is an Authorised Contractual Scheme (ACS)?

An ACS is a form of collective investment scheme. It is essentially a pool of assets held by a depositary and managed on behalf of a number of investors in accordance with contractual arrangements agreed between the parties.

The scheme has an operator (or manager) who is responsible for the operation of the scheme, including decisions about the investment of investors’ funds in accordance with the contractual arrangements.

The depositary is responsible for holding and safeguarding the assets that are part of the scheme. The depositary will acquire and dispose of assets on behalf of investors in the ACS on the instructions of the operator.

An ACS must be authorised by the Financial Conduct Authority. The operator and depositary must also be FCA-authorised persons.

There are two types of ACS: a Co-ownership ACS and a Partnership ACS - see IFM08130.

Tax

An ACS is not a legal person and is not within the charge to direct taxes. An ACS is “transparent” for tax purposes - each investor is taxable on their own share of income as it arises at the rate of tax applicable to them in accordance with their tax status.

Investors are also liable to tax on gains – see IFM08130.

The operator of the ACS will account for any stamp taxes (IFM08420) payable on acquisitions of assets on behalf of the investors.

The supply of services of managing an ACS is exempt from VAT (see IFM08430).