IFM06120 - Tax elected funds (TEFs): introduction & conditions of membership for the TEF regime: overview of conditions of membership

Entry into the TEF regime is subject to HMRC approval. The manager of the fund, or proposed manager for a newly formed fund, must make an application in writing to HMRC that it wants the TEF rules to apply from a given date. The fund must be an open-ended investment company (OEIC) or an authorised unit trust (AUT) (see IFM02110) and meet the following conditions:

  • the property condition (IFM06130);
  • the genuine diversity of ownership (GDO) condition (IFM06140);
  • the loan creditor condition (IFM06150); and
  • the scheme documentation condition (IFM06160).

An application for the TEF regime will apply from the beginning of an accounting period for an existing and newly formed fund - see IFM06230. “Accounting period” is defined in section 9 of the Corporation Tax Act 2009.