IFM03326 - Authorised investment funds (AIFs): taxation of investors within the charge to CT: qualifying investments test
Rules for determining when a company holding fails the qualifying investments test � Chapter 3 of Part 6 Corporation Tax Act 2009 (CTA09)
»Ê¹ÚÌåÓýapp test is failed when the AIF has qualifying investments which have a market value over 60% of the AIF’s total assets at any time during the investor’s accounting period.
»Ê¹ÚÌåÓýapp list of qualifying investments includes all those which enable an AIF to make an interest distribution (Regulation 20 of SI2006/964) so any holding in an AIF which could make an interest distribution (whether or not it actually does so) automatically fails the test.
»Ê¹ÚÌåÓýapp list also includes qualifying holdings in offshore funds which would themselves fail to satisfy the qualifying investments test.
A person within the charge to CT (usually a company) is required to treat the holding as a loan relationship (as described at IFM03324) if the AIF in which it has a holding fails the test at any time during that person’s accounting period for CT.