IFM09110 - Introduction: what is a Reserved Investor Fund (RIF)?
The Reserved Investor Fund (RIF) is a new type of investment fund with lower costs and more flexibility than existing UK alternatives. It will be open to professional and institutional investors. It complements the UK’s existing funds regimes and provides a UK alternative to similar types of offshore funds. It is expected that most RIFs will be used by institutional investors, such as UK pension funds, to hold UK property.
RIFs are contractual collective investment schemes. They are tax transparent for income purposes, so the income of a RIF will arise directly to its investors. The rules have been designed to both:
- simplify, as far as possible, capital gains treatment for investors
- ensure that rules for taxing gains on UK property, disposed of by non-resident investors, function as intended
The RIF is intended to replicate the Co-ownership Authorised Contractual Scheme (IFM08000+) but without requiring authorisation by the Financial Conduct Authority (FCA). In common with a co-ownership authorised contractual scheme, a RIF is:
- A form of collective investment scheme, essentially a pool of assets held by a depositary and managed on behalf of a number of investors (‘participants’) in accordance with contractual arrangements agreed between the parties.
- It 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 on behalf of the participants, who have beneficial ownership of the scheme property. The depositary will acquire and dispose of assets on behalf of investors in the RIF on the instructions of the operator.