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HMRC internal manual

Investment Funds Manual

Co-ownership authorised contractual schemes (ACS): Investors within the charge to Income Tax

Investors in CoACS who are within the charge to income tax (IT) may be:

  • Certain professional investors, such as exempt unauthorised unit trusts; or
  • Individuals who have invested a minimum of £1m in the CoACS.

For investors who are individuals, income arising to them in the CoACS will be subject to IT at their marginal rate for that type of income at the time it arises. That includes any income allocated to investors from investments in offshore funds (see IFM08350 to IFM08360).

If the fund holds interest bearing assets then these may be deeply discounted securities for which the accruing discount is taxable as well as any interest coupons paid out by the issuer of the securities.  See SAIM3000 for further information.