Explanatory note

These Regulations amend the Authorised Investment Funds (Tax) Regulations 2006 (S.I. 2006/964) which make provision about the treatment of authorised investment funds for tax purposes.

Regulation 1 provides for citation, commencement and effect.

Regulation 2 introduces the amendments.

Regulations 3 and 4 amend regulation 26 and insert regulation 33A to extend the cases in which interest distributions may be paid without the deduction of income tax to cases where the units in a fund are not marketed to investors resident in the United Kingdom. Regulations 5 and 6 amend regulations 46A and 46B to permit rebates in relation to management charges in relation to such units to be made without deduction of tax.

Regulations 7 to 11 make amendments to remove references to ‘ordinarily’ resident as section 219 of, and Schedule 46 to, the Finance Act 2013 remove the concept of ‘ordinary residence’ from primary legislation for most tax purposes. These amendments have effect for the purposes of a person’s liability to income tax for the tax year 2014-15 and any subsequent tax year, and to the making of declarations on or after 6th April 2014. The amendments do not affect declarations or undertakings made before that date, which will continue to operate on the basis of declaring and notifying changes to ordinary residence status.

A Tax Information and Impact Note relating to the gross payment of interest regulations will be published on the HMRC website at http://www.hmrc.gov.uk/thelibrary/tiins.htm. A separate Tax Information and Impact Note relating to the removal of ordinary residence in primary legislation and covering the relevant parts of this instrument was published on 11th December 2012 alongside the Finance Bill 2013 and is available on the HMRC website at http://www.hmrc.gov.uk/thelibrary/tiins.htm. It remains an accurate summary of the impacts that apply to this instrument.