Collectives: exemptions: exempt investments - interests in other collective investment schemes - mistakes
As outlined in STSM105050, an investment in a Collective Investment Scheme is to be regarded as an exempt investment under FA86/S99(5B)(b) if, and only if, both:
- The underlying scheme is a collective investment scheme as defined in the Financial Services and Markets Act 2000 (FSMA);
- The value of the underlying scheme’s non-exempt investments is no more than 20%of the value of its total investments.
Where a fund manager classified, in good faith, an interest in an underlying scheme as exempt but that interest later turned out not to qualify, then HM Revenue & Customs (HMRC) will expect the appropriate Stamp Duty Reserve Tax (SDRT) and interest to be paid. Penalties will not be due where this guidance had been followed and the manager can demonstrate reasonable grounds for believing the investment to qualify as exempt.
The FA99/SCH19 charge applies only to units and OEIC shares which are surrendered and transferred prior to 30 March 2014. See STSM103005.
See STSM101010 for the meaning of a Collective Investment Scheme.
See STSM101020 for the meaning of a unit trust.
See STSM101050 for the meaning of an OEIC.