Authorised Contractual Scheme Manual

Each investor in an SCA is responsible for all taxes incurred on their own share of income at their own tax rates, as if they directly owned the underlying assets of the system. Both the two legal forms of ACS and their tax treatment differ significantly from other forms of investment funds authorised in the UK, in particular authorised investment funds (TUEs) and open-ended investment companies (OEICs). For more information on the tax treatment of these funds, see Tax Overview for Eligible Investment Funds (AIFs). • Program documents and permits. We have drafted the ACS Certificate for the Industry IA Standard and can prepare and negotiate relevant system documents and ancillary contracts and manage the FCA approval process. ACS can be established in two legal forms: (i) as approved condominium regimes and (ii) as approved limited partnerships. Both forms are available as UCITS, NURS and QIS. For the separate tax regime that applies to certain UK-licensed funds that invest in real estate assets, see Practical note: PAIFs – System Taxation. For more information on the tax treatment of UK-authorised investment funds that have opted for the Tax Elected Funds (TEF) scheme, see Practice Note: AIF – Tax Selected Funds. This practice note covers a type of uk-authorised investment fund known as an Authorised Contractual System (ACS). It contains a description of the two different legal forms that an SCA can take and the tax treatment of these funds and their stakeholders (i.e. investors).

This practice note focuses on direct taxes, but also touches on uk property transfer tax and withholding tax outside the UK. AcS co-owners also enjoy favourable stamp duty treatment in the UK, including seedling facilities for titles and immovable property (with the exception of the conversion tax on land and buildings). They also benefit from VAT (VAT) on their administrative costs like other investment funds authorised in the UK. The situation with regard to capital gains realized on the sale of investments through approved co-ownership agreements is similar, that is, there is no tax in the fund itself. However, for the sake of simplicity, UK taxpayers are taxed as if their participation in the fund were an asset for capital gains (and not the underlying assets); This is not relevant for investors outside the UK tax system. • Advice on derivatives. Our derivatives team advises authorized funds, including ACS, on their derivatives strategies, guarantees, securities agreements, agreements and compliance with regulatory obligations. The FCA`s Manual of Rules and Guidelines governs approved co-ownership funds, in particular in the Mutual Fund Data Collection, COLL. They must therefore have a prospectus corresponding to that of the other authorised funds and the ACS act. The main differences between the AMS and other approved funds do not lie in their constitutional documents, but in their administrative arrangements. Approved limited partnerships are broadly similar to other limited partnerships in the UK. You benefit from the fact that (i) investors are able to repay the shares of the Fund without remaining responsible for the debts of the company, so that it is not necessary to structure the participations in the company as loans, (ii) that the general partner is not responsible for the debts of the limited partnership, unless he is guilty of obvious misconduct, so it is possible: use the same company to manage the OEICs.

authorized mutual funds and acec and (iii) no need to publish partnership changes. An approved limited partnership fund therefore operates in the same way as other collective investment undertakings. The tax situation in the United Kingdom of authorised limited partnerships is the same as for other Uk (and non-UK) partnerships; they are tax transparent for UK income and capital gains tax purposes. • Ongoing management of regulation and compliance. Our team can help you with future system changes and with any necessary regulatory or investor notifications. In a co-ownership fund, investors have shares in the Scheme property as joint tenants (if incorporated under English law or as joint ownership of the participants if Scottish law applies), even if they are held on their behalf by a depositary. The fund is essentially a contract that each investor enters into with the operator (the ACS manager) and the custodian of the fund. Since then, we have responded to the creation of five of the first seven transparent condominium tax funds, including the first securities fund and the first real estate fund, as well as the first municipal pension plans. We also worked for the custodian or host in the other two AECs.

No approved limited partnership has yet been established. ACS is a class of collective investment schemes (SIDs) introduced in the UK in 2013 to provide a UK alternative to the tax-transparent fund structures available in other jurisdictions such as Luxembourg and Ireland. HMRC has published guidelines on SCAs as part of its Investment Funds Manual under IFM08000–IFM08650. Eversheds Sutherland was tasked with designing and implementing five of the first seven ACSs as co-ownership and worked on the other two in various roles (advising a custodian, acting as a specialist advisor to a guest DCA and a director, and working on a key framework for ACS derivatives transactions). We are currently actively working on three other ACS. • Custodian. Our team of dedicated custodians can advise custodians on relevant matters and negotiate and prepare custodian contracts and ancillary documentation. . Both types of ACS are transparent for UK income tax purposes, so they are not subject to income tax or corporate tax on their income. .

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