IFM17420 - Genuine Diversity of Ownership (GDO): advance clearance procedure: Application

Applications for statutory clearances relating to authorised investment funds or offshore funds must be made in writing in respect of an accounting period for which clearance is sought to HMRC’s Collective Investment Schemes Centre.

The manager or proposed manager is advised to use the GDO advance clearance application form to make this clearance request. The form provides a ‘checklist’ which it is hoped will, when followed, reduce the chance of an application being refused.

The pro forma application form (CISC5) is available on the gov.uk website.

The application should be accompanied by:

  • the instrument constituting the fund (the instrument of incorporation for an open-ended investment company or the trust deed for an authorised unit trust) or other document which outlines the form the fund will take; and
  • the current prospectus or proposed prospectus (including any supplements to the prospectus).

A fund may find it helpful to explain in the application the reasons for particular terms and conditions, such as variations in management charges or minimum investment levels for different categories of investors.

Where the fund relies on an associated feeder fund structure to meet the GDO condition, in addition to the fund documents stated above, the manager must also submit the fund documents of the feeder fund.

HMRC will consider the application within 28 days of its receipt and will respond in writing to:

  • request further information (the 28 day period to respond will re-start once all the relevant information has been received by HMRC);
  • give clearance (which may be subject to stated conditions); or
  • refuse to give clearance. HMRC will explain the reasons for refusal. Refusal does not prevent a further application, but HMRC would expect that the reasons for the refusal would be addressed before a further application is made.

Where a fund is already established, HMRC would not expect the fund documents (or draft fund documents) supplied to be in conflict with the fund’s normal practice of marketing and making available the units or shares in the fund. If there is any conflict then the fund should include an explanation as to why this is the case and where necessary set out proposed changes in practices (to comply with condition C), with their application.