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HMRC internal manual

Savings and Investment Manual

From
HM Revenue & Customs
Updated
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Collective investment schemes: unauthorised unit trusts: pension funds pooling schemes: administration

Participants: applications

Only UK exempt approved pension schemes and their overseas equivalents may participate in a pension funds pooling scheme (PFPS). The trustee of each PFPS must submit every application to participate in the PFPS to Pension Schemes Services Nottingham, who will advise whether a particular scheme is eligible to participate in the PFPS.

The trustee must not admit any participant to the scheme until they have received confirmation from PSS Nottingham that the participant is eligible to participate. If a participant is admitted to the scheme before confirmation of eligibility is received, then the scheme is not a PFPS for each tax year that the non-eligible participant participated in the scheme. In such a case, the provisions of Part 9 Chapter 9 ITA07 will apply, that is the scheme will be treated as an unauthorised unit trust. In addition TCGA92/S100 (2) will not apply for each tax year the scheme is treated as an unauthorised unit trust where overseas participants invest in the scheme.

HMRC office responsible

PFPS are dealt with in the Collective Investment Schemes Centre Sheffield, who will be responsible for agreeing a method of calculating and of attributing to each participant the amount of any income arising from the scheme property, and any balancing adjustments and disposal values under the Capital Allowances Act 2001.

The arrangements for the central agreement of figures and issue of certificates are necessary to avoid involving each participant in separate enquiries. There is no formal system of determination, appeal etc. 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 are involved the matter may need to be settled formally by a claim from a particular participant.

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Provision of certificates to investors

The trustee is to provide a certificate to each participant showing the amounts of any income, etc agreed with HMRC, and agreed as attributable to that participant.. The certificate is to be issued within three months of the end of each accounting period.

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Provision of information to HMRC by trustee

The trustee is also required to produce the following information within three months of the end of each tax year, in respect of the accounting period of the scheme ending in that year.

  • The full title of the scheme or fund and the HMRC reference number relating to the scheme or fund.
  • A copy of any certificate supplied by the trustee to the participant showing the amounts of income and capital expenditure agreed with HMRC.
  • A copy of the notice given to the participant revoking or withdrawing approval, the date or dates if any units were sold or cancelled, and the date on which the participant ceased to participate in the scheme.
  • Confirmation that the participant had not at any time in that year received notification from HMRC that it was not an exempt approved scheme or, as the case may be, a superannuation fund.

As regards a participant in the relevant year the information is

  • the full title of the scheme;
  • details of any changes to the scheme made after the initial application or the last notification of any such changes;
  • a copy of any certificate supplied by the trustee to the participant showing the amounts of income and capital expenditure agreed with the Inspector;
  • a copy of the notice given to the participant revoking or withdrawing approval, the date or dates if any units were sold or cancelled, and the date on which the participant ceased to participate in the scheme.

The manager acting on behalf of the trustee will often meet the responsibility of the trustee.

The Collective Investment Schemes Centre Sheffield retains the information and copies of certificates provided by the trustee to enable information supplied to the investor’s HMRC office to be verified, if necessary.

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Expulsion of participants

The Regulations require the trustee of a pension funds pooling scheme (PFPS) to expel participants who cease to be eligible to participate. This means that the participant’s units in the PFPS have to be sold, either to an incoming participant, or to one or more existing participants, or cancelled within 28 days, after the trustee has received notice from HMRC.

If some or all of the units cannot be sold in time and have to be cancelled, it may not possible for the trustee to make full immediate payment, or redemption in specie, to the outgoing participant particularly where the PFPS is invested substantially in illiquid assets. When payment is actually made to the participant will not affect the date on which the participant ceases to participate in the PFPS. For the purposes of the Regulations the date on which a participant ceases to participate is the date on which the last of its units are sold or cancelled. Provided that date is within 28 days of the trustee receiving the appropriate notice from the Commissioners for HMRC the status of the scheme as a PFPS will not be affected.