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HMRC internal manual

Savings and Investment Manual

Collective investment schemes: unauthorised unit trusts: enterprise zone schemes: administration

Action in HMRC offices

All schemes are dealt with by Charities, Assets and Residence (Trusts) Truro.

Trustee’s obligations

The trustee is obliged to negotiate and agree with HMRC, in respect of each participant (investor)

  • the capital expenditure incurred on the construction of buildings or structures which qualifies for Industrial Buildings Allowance - this should identify separate buildings to enable future charges etc to be calculated in the event of the disposal of a single building;
  • capital expenditure incurred on the provision of plant and machinery which qualifies for writing down allowance;
  • the amount of any sale, insurance, salvage or compensation moneys on an event giving rise to a balancing charge or allowance on industrial buildings;
  • the disposal value to be brought into account for plant and machinery;
  • property income;
  • interest or other income.

There is no formal system of determination or appeal, but in the event of an unsettled dispute the trustee should be advised that, since the figures are not agreed they cannot issue the required certificate. If reliefs, balancing charges or income are involved the matter may need to be settled formally by a claim from, or assessment on, a particular investor, and the trustees’ and investors’ HMRC offices should liaise accordingly.

Any capital gain on disposal of trust property remains assessable on the trustee.

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Provision of certificates to investors

The trustee is to provide a certificate to each investor which shows the amounts agreed on his behalf, of

  • his part of the capital expenditure on buildings or plant and machinery which qualifies for capital allowances;
  • his part of the sale etc proceeds of buildings which may give rise to a balancing adjustment of the disposal value of plant and machinery to be brought to account;
  • property, or saving and investment, income under Part 3 or Part 4 of ITTOIA05.

The certificate is to be issued within three months of the end of each accounting period but it may not be possible to meet this time limit if agreement of the figures is delayed. In that case HMRC may allow a month following the date of agreement.

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Provision of information to HMRC by trustee

The trustee is also required to produce in writing, at least once each tax year, in respect of the previous year

  • the name, address and tax reference of each investor (together with the NI number in the case of individuals);
  • the extent of each investor’s interest (this will normally be in terms of units held);
  • copies of the certificates issued to investors.

The trustee’s responsibility will often be met by the manager acting on his behalf.

Charities, Assets and Residence (Trusts) Truro retains the information and copies of certificates provided by the trustee to enable information supplied to the investor’s office to be verified if necessary.