IFM36230 - Deemed Trade: Collective investment schemes
Collective investment schemes
ITA07/S809EZA(6)
The disguised investment management fees (DIMF) legislation only applies where there is an investment scheme involved.
For the purposes of Chapter 5E, this includes:
- A collective investment scheme, as defined using the meaning in S235 of the Financial Services and Markets Act 2000, and
- Investment trusts, which are companies in relation to which conditions A to C in S1158 of the Corporation Tax Act 2010 are met (or treated as met); and for this purpose “company” has the meaning given by S1121 Corporation Tax Act 2010.
Body corporates, which include but is not limited to companies and investment trusts are generally not collective investment schemes, as a result of the exclusions in Financial Services and Markets Act 2000 (Collective Investment Scheme) Order 2001, SI 2001/1062. However Open Ended Investment Companies (OEICs) defined in S236 Financial Services and Markets Act 2000 are collective investment schemes.
Example
ABC plc is in the process of seeking a listing of its shares on a stock exchange. The company is seeking to raise £1bn of new money on the listing. The money raised on the listing is intended to be used to purchase a number of private businesses. Ian is the Finance Director of ABC plc and is currently spending a significant amount of time researching and meeting potential investors.
While Ian’s role may include “investment management services”, it is in relation to ABC plc which is not an investment scheme.