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SCHEDULE 19
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STAMP DUTY RESERVE TAX ON SURRENDER OF UNITS IN UNIT TRUSTS |
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Charge to tax |
| | 1. - (1) There is a charge to stamp duty reserve tax under this Schedule where-
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(a) a unit under a unit trust scheme is transferred to the managers of the scheme, or |
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(b) a person authorises or requires the trustees or managers under a unit trust scheme to treat him as no longer interested in a unit under the scheme. |
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Those events are referred to in the following provisions of this Schedule as a "surrender" of the unit.
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(2) Stamp duty reserve tax is chargeable under this Schedule-
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(a) whether the surrender is made or effected in the United Kingdom or elsewhere, and |
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(b) whether or not any party is resident or situate in any part of the United Kingdom. |
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(3) The persons liable for the tax are the trustees of the unit trust.
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Rate of tax |
| | 2. - (1) Tax is charged under this Schedule at the rate of 0.5% of the market value of the unit at the time of its surrender, subject to the following paragraphs.
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(2) The market value means the price it might reasonably be expected to fetch on a sale in the open market at the time of its surrender.
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Proportionate reduction of tax by reference to units issued |
| | 3. - (1) The amount of tax chargeable shall be proportionately reduced if the nominal value of the units of that class surrendered to the managers in the relevant period exceeds the nominal value of the units of that class issued by them in that period.
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(2) The relevant period in relation to a surrender is the period from the beginning of the calendar month in which that surrender occurs to the end of the following calendar month.
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(3) The reduction is made by applying the following fraction to the amount otherwise chargeable-
I
---
S
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| | Where:
I is the nominal value of the units issued by the managers in the relevant period, and
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S is the nominal value of the units surrendered to the managers in that period. |
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(4) For the purposes of this paragraph units are of the same class if their nominal value is the same.
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(5) For the purposes of this paragraph the nominal value of units means the price at which similar units are first or were first obtainable under the scheme from the managers or trustees.
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(6) This paragraph does not apply if on the surrender of the unit the unit-holder receives anything other than money; and for the purposes of this paragraph no account shall be taken of a surrender or issue that is not entirely for money.
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Exclusion of charge in case of in specie redemption |
| | 4. - (1) There is no charge to tax under this Schedule if on the surrender of the unit the unit-holder receives only such part of each description of asset in the trust property as is proportionate to, or as nearly as practicable proportionate to, the unit holder's share.
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(2) There is no charge to tax under section 87 of the Finance Act 1986 (general charge to stamp duty reserve tax) in respect of a transfer of trust property to the unit-holder on the surrender of units in a unit trust scheme.
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Exception from charge: foreign unit trust |
| | 5. This Schedule does not apply to a surrender of a unit under a unit trust if at the time the surrender is made-
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(a) all the trustees under the scheme are resident outside the United Kingdom, and |
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(b) the unit is not registered in a register kept in the United Kingdom by or on behalf of the trustees under the scheme. |
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Exception from charge: trusts holding only interest-bearing assets |
| | 6. - (1) This Schedule does not apply to an authorised unit trust scheme under the terms of which the funds of the trust-
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(a) cannot be invested in such a way that income can arise to the trustees which will be chargeable to tax in the hands of the trustees otherwise than under Case III of Schedule D, and |
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(b) cannot be invested in any investment on the transfer of which ad valorem stamp duty would be chargeable. |
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(2) In sub-paragraph (1) "authorised unit trust scheme" has the same meaning as in the Financial Services Act 1986.
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Interpretation |
| | 7. - (1) In this Schedule "trust property", in relation to a unit trust scheme, has the same meaning as in Part VII of the Finance Act 1946.
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(2) For the purposes of this Schedule "issue" in the context of the issue of a unit by the managers under a unit trust scheme includes their transferring an existing unit or authorising or requiring the trustees to treat a person as entitled to a unit under the scheme.
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(3) References in this Schedule to the surrender or issue of a unit under a unit trust scheme do not include a surrender or issue effected by means of, or consisting of the issue of, a certificate to bearer within the meaning of Part VII of the Finance Act 1946.
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Transitional provision |
| | 8. This Schedule applies to surrenders of units under a unit trust scheme on or after 1st October 1999.
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