IFM04430 - AIFs: Property authorised investment funds (PAIFs): deducting and accounting for tax from distributions: gross payments of property income distributions
Entitlement of investors to receive gross distributions (regulation 69Z24 SI 2006/964)
A PAIF will only make gross payments of Property Income Distributions (PIDs) to an investor who would be entitled to receive a distribution out of the tax-exempt profits of a UK Real Estate Investment Trust (UK REIT) gross – see regulation 7 of SI 2006/2867 and the guidance on REITs.
A PAIF must pay PIDs gross if it reasonably believes that the person beneficially entitled to the payment falls within one of the categories below – see IFM04440.
The following list sets out categories of investor entitled to gross PIDs:
- UK tax resident company;
- UK authorised investment fund;
- non UK tax resident company carrying on a trade through a permanent establishment and which is required to bring the distributions into account for computing its profits for the purposes of calculating its corporation tax;
- the account manager of an ISA;
- a local authority;
- a health service body;
- a public office or Crown department;
- a charity or other similar body that has been granted exemption in the same way as a charity;
- a scientific research organisation;
- the scheme administrator of a registered pension scheme (eg a SIPP);
- the sub scheme administrator of a sub scheme which forms part of a split scheme under the Registered Pensions (Splitting of Schemes);
- a parliamentary pension fund;
- account provider of a child trust fund;
- a European investment fund; and
- certain partnerships (with investors falling in the categories listed above).
See regulation 7 SI 2006/2867 and sections s933 to 937 Income Tax Act 2007 for the full wording relating to the above categories.