United Kingdom Authorised Unit Trusts

New Clause 16 – in the House of Commons at 9:45 pm on 15th July 1991.

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'Authorised unit trusts: unfranked income trusts

468G—(1) This section applies where—

  1. (a) as regards a distribution period ending alter 31st December 1991 a dividend is treated by virtue of section 468(2) as paid to a unit holder (whether or not income is in fact paid to the unit holder), and
  2. (b) all or part (in this section the "appropriate portion") of the dividend is paid from sources other than franked investment income, and
  3. (c) the dividend is treated as paid by the trustees of a unit trust scheme which is an authorised unit trust as respects the accounting period in which the distribution period falls, and
  4. (d) arrangements with the Board as provided in section 468H are in force in respect of such unit trust scheme.

(2) Where this section applies, if the unit holder to whom the dividend is treated as paid is not resident in the United Kingdom for the whole of the year of assessment in which the dividend is treated as paid and is resident in a qualifying country, he shall be entitled, on the payment (or deemed payment) of the appropriate portion of the dividend, to payment by the trustees of such unit trust scheme of the tax credit (if any) to which an individual resident in the United Kingdom would have been entitled had he received such dividend, and no United Kingdom tax shall be payable in respect of such dividend or the amount of the tax credit so paid.

(3) For the purposes of subsection (2) above, a person shall be treated as not resident in the United Kingdom and resident in a qualifying country for a year of assessment if this is proved on a claim in that behalf made to the Board.

(4) Where units are held under a trust and the person who is the beneficiary in possession under the trust is the sole beneficiary in possession and can, by means either of the revocation of the trust or the exercise of any power under the trust, call upon the trustees at any time to transfer the units to him absolutely free from the trust, that person shall, for the purposes of this section, be treated as the unit holder.

(5) The trustees shall certify in writing to the investor the appropriate portion of the dividend together with the amount of the tax credit referable thereto and to which a recipient is entitled to a payment as provided in this section.

(6) In this section "qualifying country" means any country which is at any time during such year of assessment a member state of the European Economic Community or any other country which is for the time being designated for the purposes of this section as a qualifying country by order made by the Board.