CTM48635 - Authorised investment funds (AIFs): gross payment of interest distributions: residence condition: form R105(AIF)

Payment of interest distributions to non-resident participants without deduction of tax - SI2006/964 Regulation 30

A fund (the open-ended investment company or the trustees of the authorised unit trust) must (provided they have a valid declaration) pay interest distributions without deducting tax where the participants (beneficial owners of units/shares) are:

• individuals who are not ordinarily resident in the UK, or
• personal representatives of deceased not ordinarily resident individuals who held the units concerned immediately before their deaths, or
• persons who satisfy the residence requirements in cases where the whole of an interest distribution is made to, or received under, a trust and is, or falls to be treated as, or is deemed to be, income of those persons and not the trustees of the trust, or
• certain trusts where the trustees are not resident in the UK.

In each of these cases the unit holder(s) must have made a valid declaration (form R105 (AIF) or approved substitute), in the format specified for that purpose, that the residence requirement is satisfied. An exception is where a unit holder is the personal representative of a deceased unit holder who had made a valid not ordinarily resident declaration that was still valid at the time of his death.

The form for declaration of non-residence can be found on the HMRC website (http://www.hmrc.gov.uk/index.htm). Fund administrators may use their own version of the form if the form hasbeen approved by HMRC prior to use (CTM48665).