Citation, commencement and effect

1. —(1) These Regulations may be cited as the Authorised Investment Funds (Tax) (Amendment) (No. 2) Regulations 2012 and come into force for the purposes of regulations 7 to 11 on 6th April 2014 and for all other purposes on 19th December 2013.

(2) The amendments made by these Regulations have effect as follows—

(a) regulation 3(a) has effect from 19th December 2013,

(b) regulations 3(b) and 4 to 6 have effect in relation units acquired on or after19th December 2013;

(c) regulations 7 and 8 have effect for the purposes of a person’s liability to income tax for the tax year 2014 - 15 and any subsequent tax year;

(d) regulations 9 to 11 have effect in relation to the making of declarations on or after 6th April 2014. Any declarations made before that date continue to have effect in respect of interest distributions made on or after that date as if those amendments had not been made.

Amendments to the Authorised Investment Funds (Tax) Regulations 2006

2.The Authorised Investment Funds (Tax) Regulations 2006( 2 ) are amended as follows.

Gross payment of interest distributions

3. In regulation 26 (deduction of tax where interest distributions made)—

(a) in paragraph (2), for “section 349(2) of ICTA” substitute “section 874 of ITA 2007”, and

(b) in paragraph (4)—

(i) at the end of sub-paragraph (c) omit “or”, and

(ii) at the end insert—

“ , or

(f) the offshore marketing condition is met with respect to the class of units in relation to which the distribution is made (see regulation 33A). ” .

4. After regulation 33 insert—

“ The offshore marketing condition

33A. The offshore marketing condition is met with respect to a class of units if—

(a) marketing of units of that class is not directed to investors resident in the United Kingdom, and

(b) before units of that class are acquired, information in relation to those units is available to investors to the effect that—

(i) no sum representing income tax will be deducted from any interest distribution in relation to those units, and

(ii) an investor must notify HM Revenue and Customs of any distribution in relation to such units if the investor is chargeable to income tax for the tax year in which the distribution date falls. ”

5. In regulation 46A (annual payments – duty to deduct income tax)( 3 ), in paragraph (6), for the words after “believing” to the end substitute—

“ that—

(a) the participant is not resident in the United Kingdom, or

(b) the payment is made in respect a class of units in relation to which of the offshore marketing condition in regulation 33A is met. ” .

6. In regulation 46B (consequences of reasonable but incorrect belief), in paragraph (1)(b) for “regulation 46A(6)” substitute “regulation 46A(6)(a)”.

Ordinary residence

7. In regulation 27 (the reputable intermediary condition), in paragraph (3) omit “ordinarily”.

8. In regulation 29 (consequences of reasonable but incorrect belief), in paragraph (5) omit “ordinarily”.

9. In regulation 30 (the residence condition)—

(a) in paragraphs (2), (3)(b) and (4)(b) omit “ordinarily”;

(b) in paragraph (5) for “he is either not ordinarily resident or, in the case of a company,” substitute “the person is”;

(c) in paragraph (6)(b) omit “either not ordinarily resident or, in the case of a beneficiary which is a company,”.

10. In regulation 31 (residence declarations)—

(a) in paragraph (2)(b) omit “ordinarily”;

(b) in sub-paragraphs (4)(c)(ii) and (iii) omit “ordinarily resident or, in the case of a company,”.

11. In regulation 33 (interest distributions: the position of the legal owner), in paragraphs (3) and (4) omit “or ordinarily resident”.