10. Taxation of CIS

Question 1

CIS - gains and tax

Answer 1

UK CIS are exempt from gains made within fund (adv over LI funds)

Any income (other than dividend income) is subject to marginal rate of 20%

Management expenses can be offset against income

On disposal, subject to CGT

Question 2

CIS - Interest Bearing Securities

Answer 2

Where a fund holds more than 60% of investments in interest bearing securities

The income (including dividend income) is considering savings income

PSA can be used against this

Question 3

CIS - Reporting and Non-reporting Status

Answer 3

Reporting

• Applied to HMRC and meet criteria
• Have to report actual distributions received and reportable income in excess of sums distributed

Non-reporting
- roll up funds