STSM103040 - Collectives: The Schedule 19 charge: Market value of units and OEIC shares

The market value of a unit in a unit trust or an Open-Ended Investment Company (OEIC) share means whichever the higher is of:-

• The price the unit or OEIC share might reasonably be expected to fetch on a sale in the open market at the time of surrender; and
• Its cancellation price or, if it is redeemed, its redemption price, at that time, calculated in accordance with the trust or OEIC instrument.

In normal circumstances, the cancellation/redemption price equates to the open market value of the units/OEIC shares.

A fund manager will typically calculate the market value of a unit/OEIC share by reference to the Net Asset Value (NAV) of the fund. The NAV is determined by valuing all of the fund’s investments and cash on hand less any liabilities, then dividing the resultant total value by the number of units or OEIC shares that are in issue. Valuing units/OEIC shares is usually undertaken by a fund manager each day at a fixed time in accordance with the rules of the trust/OEIC, although the dates and timing of valuation can vary between fund providers.

The FA99/SCH19 charge applies only to units and OEIC shares which are surrendered and transferred prior to 30 March 2014. See STSM103005

See STSM101020 for the meaning of a unit trust.

See STSM101050 for the meaning of an OEIC.