IFM10270 - Exempt unauthorised unit trust (EUUT) transitional provisions

Regulation 30 of SI 2013/2819

The commencement and transitional provisions apply as follows –

  • For EUUTs preparing annual accounts to an account year ending on or before 31 October 2013 in the tax year ended 5 April 2014, 2014-15 will be a transition tax year and the full effect of the new rules will apply from the 2015-16 year onwards;
  • For EUUTs preparing annual accounts to an account year ending after 31 October 2013 in the tax year ended 5 April 2014, 2013-14 will be a transition tax year and the full effect of the new rules will apply from the 2014-15 year onwards; and
  • Where the transitional year of an EUUT is 2013/14 or 2014/15, provisions apply to determine the income of the trust for that year and the date on which deemed payments or deemed deductions are treated as made by the trustees.

The income of an EUUT for its transitional year is taken to be its income arising in the period beginning with 6 April and ending with the accounting date in that year. Accordingly where an EUUT has an accounting date of 31 December 2013, its transitional year will be 2013/14 and its income for that year will be the income arising in the period 6 April 2013 to 31 December 2013.

Where an EUUT prepares accounts for the period from 1 March 2013 to 31 May 2014, it will have no accounting date in 2013/14. In that case its transitional year will be 2014/15. Income arising in the period 1 March 2013 to 5 April 2014 will be income partly for 2012/13 and partly 2013/14. Income for the transitional year 2014/15 will be income arising in the period 6 April 2014 to 31 May 2014.

Where an EUUT is invested in securities within the meaning of Chapter 2 of Part 12 of ITA 2007 (securities within the accrued income scheme), any income which would in the normal course have been treated as made by the trustees in the tax year following the transitional year is instead treated as made in the transitional year.

Where an EUUT would normally have been treated as making a deemed payment after the accounting date of the transitional year it will instead be treated as making that payment on the accounting date.

As part of the tax return to be filed by an EUUT for its transitional year, the calculation of the trustees’ income pool (see s 943 ITA 2007) will reflect both the income for that year in line with this regulation and also the deemed payment treated as made on the accounting date.