The share class has been certified by HM Revenue & Customs (“HMRC”) as a reporting fund at year end (ie 31 December). Reporting funds have an annual requirement to calculate and report to UK investors and HMRC the reportable income per share and distributions made for each share class. Provided the share Classes comply with this annual reporting requirement, any gain accruing upon sale or other disposal of the interest by each UK shareholder will be subject to tax as a capital gain rather than income.
What does this mean for investors?
Investors will be required to include on their tax return any distributions received during the year and their proportionate share of reportable income in excess of any distributions received. The proportionate share of the reportable income is calculated as follows:
Total number of shares held by the investor x Reportable income per share in each Class at year end (ie 31 December)
The excess reportable income per share must be multiplied by the total number of shares you held in each Class at year end (ie 31 December) in order to derive the total reportable income to be included in your tax return. The timing of the receipt of income is as follows:
- UK individual investors: The deemed distribution date for excess reportable income over any cash distributions received is 6 months after the end of the accounting period. As the accounting year end of the Fund is 31 December, the deemed distribution date is 30 June.
- UK corporate investors: As the deemed distribution date is 6 months after the end of the accounting period, this income must be included in your tax return in accordance with the accounting period in which this date falls.