United Kingdom Taxation
The below statements on taxation are intended to be a general summary of the UK tax treatment that may be applicable to UK Investors in the following Funds:
- Schroder Alternative Solutions (AS)
- Schroder GAIA
- Schroder International Selection Fund (ISF)
- Schroder Special Situations Fund (SSF)
- Schroder Investment Fund (SIF)
The statements relate only to Investors who are UK resident or ordinarily resident for UK tax purposes, who are the beneficial owners of their Shares and who hold their Shares as an investment (as opposed to on trading account). The statements are based on current law and the published practice of Her Majesty's Revenue & Customs ("HMRC").
Distributions paid by Funds that hold more than 60% of their assets in interest-bearing, or economically similar, form at any time in an accounting period are treated as a payment of annual interest for UK resident individual Investors. Accordingly, such distributions in excess of the Personal Savings Allowance (£1,000 for basic rate taxpayers, £500 for higher rate taxpayers and £0 for additional rate taxpayers for the 2022/23 tax year) will be subject to tax at the rates applying to interest (20%, 40% and 45% for the 2022/23 tax year).
Where a Fund does not hold more than 60% of its assets in interest-bearing, or economically similar, form at any time in an accounting period, distributions will be treated as dividends. Accordingly, such distributions in excess of the Dividend Allowance (£2,000 for the 2022/23 tax year, £1,000 for the 2023/24 tax year) will be subject to tax at the rates applying to dividends (8.75%, 33.75% and 39.35% for the 2022/23 tax year). UK resident corporate Investors may benefit from one of the exemptions from UK corporation tax on dividends received from the Funds. Where the Fund in question holds more than 60% of its assets in interest-bearing or economically similar form at any time in an accounting period, then any distribution will be treated as interest in the hands of a corporate Investor. A corporate Investor will also be required to tax its holding in the Fund on a mark to market basis annually.
Offshore Funds Regime
All Share Classes of the Funds meet the definition of an offshore fund as laid out in relevant UK tax legislation. Accordingly, UK Investors should be aware of the following.
Reporting Fund Status
The UK Offshore Funds legislation contained in the Taxation (International and other Provisions) Act 2010 and the Offshore Funds (Tax) Regulations (SI 2009/3001) as amended (the "current regime") provides that, unless a Share Class is approved by HM Revenue & Customs as a "reporting fund", any gains arising to Shareholders resident in the United Kingdom on a sale, redemption or other disposal of Shares (including a deemed disposal on death) will be taxed as offshore income rather than capital gains. The current regime replaced a similar regime under which Share Classes obtained certification as "distributing funds" with a view to delivering capital gains treatment.
It is currently our intention that all Share Classes will seek approval as reporting funds and that these Share Classes will maintain their qualification as reporting funds in order for UK Investors to enjoy a more advantageous tax treatment. This means that on disposal of their investment UK individual Investors will generally be subject to capital gains tax rates (10%/20% for the 2022/23 tax year) rather than income tax rates (20%/40%/45% for the 2022/23 tax year).
A UK corporate Investor will be subject to corporation tax at the mainstream rate of corporation tax (19%/25% for the 2022/23 tax year).
A full list of reporting Share Classes is available from the Fund's Management Company on request.
Lists of certification dates for Reporting Fund Status are published on the HMRC website at www.gov.uk/government/publications/offshore-funds-list-of-reporting-funds
Reports made to all investors
In accordance with the UK Offshore Funds legislation, reportable income attributable to each Fund Share will be published on the Schroders website within ten months of the end of the reporting period. It is the Investors' responsibility to calculate and report their respective total reportable income to HMRC based on the number of Shares held at the end of the reporting period.
In addition to reportable income attributable to each Fund Share the report will include information on amounts distributed per Share and the dates of distributions in respect of the reporting period. Shareholders with particular needs may request their report be provided in paper form, however we reserve the right to make a charge for this service.
To the extent that reportable income exceeds distributed income, it will potentially be taxable as a further distribution in the hands of a UK resident Investor. This deemed distribution will arise on the Fund's "distribution date". This will be 6 months following the last day of the reporting period.
The daily equalisation amount per Fund Share will also be published.
Schroders operates a full equalisation policy for all the Funds, with the exception of Schroder Capital Investments Fund, with the objective that the income yield of a reporting Fund Share Class is unaffected either by incoming or outgoing investors. The equalisation amount corresponds to the income earned by the reporting Fund Share Class up to a particular date in the reporting period. Investors should use the equalisation figures published on the Schroders website to calculate any adjustment to reportable income in a year where Shares were purchased or sold.
Further details and figures on equalisation can be found here.
www.hmrc.gov.uk or your tax adviser for further details.
For the income table for each fund range, refer to the link below:
Schroder International Selection Fund
Reporting period ended 31 December 2017
Reporting period ended 31 December 2016
Reporting period ended 31 December 2015
Reporting period ended 31 December 2014
Reporting period ended 31 December 2013
Reporting period ended 31 December 2012
Schroder Alternative Solutions
Reporting period ended 30 September 2017
Reporting period ended 30 September 2016
Reporting period ended 30 September 2015
Reporting period ended 30 September 2014
Reporting period ended 30 September 2013
Reporting period ended 30 September 2012
Schroder Capital Semi-Liquid
Schroder Special Situations Fund
Schroder Investment Fund
Cazenove International Fund plc
Next Generation Absolute Return