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Entry to the regime

Where the qualifying conditions (D8.142) are met, such that a company can enter the regime, a new distribution period of the authorised investment fund commences¹.

Implications during regime

For the purposes of corporation tax, income arising to a TEF will consist of²:

1. Ìý

   (a)ÌýÌýÌýÌý distribution income (treated as an exempt distribution³) which consists of:

2. 1. Ìý

      (1)ÌýÌýÌýÌý dividend income which includes UK dividends and overseas dividends;

   2. Ìý

      (2)ÌýÌýÌýÌý property investment income in relation to shares held in a UK REIT or in a property authorised investment fund;

   3. Ìý

      (3)ÌýÌýÌýÌý property business income; and

3. Ìý

   (b)ÌýÌýÌýÌý other, non-dividend income.

Allocation of income made by TEFs

Allocations of income (distributions) by a TEF will either be as TEF distributions (dividends) or as TEF distributions (non-dividend)⁴. In most cases, investors will receive both types of distribution for each distribution period and be taxed accordingly. TEF distributions (dividends) will consist of income attributable to (a) above and TEF distributions (non-dividend) will consist