IFM06220 - Tax elected funds (TEFs): application process and effects of entry to the TEF regime: key points about the application process

The application process is covered in regulation 69Z49 of SI2006/964.

The application process

In order to become a TEF, an application must be submitted to HMRC by the manager of an existing authorised investment fund (AIF) or the proposed manager of a future authorised investment fund. HMRC must approve the application.

Before an existing AIF makes an application, it must obtain any necessary unit holder or shareholder approval required by its own rules or the Financial Conduct Authority. If regulatory approval is required the AIF must notify HMRC when this has been given.

Once a fund has been approved to be a TEF it can subsequently voluntarily leave the regime at any time (see IFM06610). If it decides to leave the regime and at a later date wants to re-apply it can only do so at the beginning of an accounting period beginning six years after it left the regime (regulation 69Z49(4)(b) of SI2006/964).

If a termination notice is issued by HMRC (see IFM06500 onwards), then the AIF will not be able to re-apply to become a TEF (see regulation 69Z49(4)(a) of SI2006/964).