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A Collective Investment Scheme such as a unit trust or an Open-Ended Investment Company (OEIC) may offer investors different classes or types of units / OEIC shares. Some funds operate separate funds for each class of unit or OEIC share issued, whereas others operate a single fund with different classes of units / OEIC shares. »Ê¹ÚÌåÓýapp two most common classes are income and accumulation.

Income Units/OEIC shares

An income class unit or OEIC share gives the holder a right to receive regular income from a fund which represents the dividends paid to the fund from companies in which the fund holds securities. Such dividends can be passed onto the unit/OEIC shareholder according to their unit/share entitlement.

»Ê¹ÚÌåÓýapp income distribution from the fund is paid in cash, although many unit/OEIC shareholders prefer to have an arrangement with the fund manager whereby the income distribution is automatically reinvested back into the fund and the holder receives additional new units/OEIC shares to their proportional of the dividend.

Accumulation Units/OEIC shares

Similar to an income unit, an accumulation class unit/OEIC share gives the holder a right to a share in any income which represents the dividends paid to the paid from companies in which the fund holds securities. But, unlike an income class unit, an accumulation unit/OEIC shareholder does not receive an actual distribution of income in cash.

Instead, the income is retained or accumulated and reinvested automatically by the fund. »Ê¹ÚÌåÓýapp holder does not receive any additional units/OEIC shares but the value of their existing units/OEIC shares is increased.

STSM104030 provides guidance on how income and accumulation class units /OEIC shares are treated for SDRT charging purposes under FA99/SCH19 for units/shares surrendered prior to 30 March 2014.

See STSM101010 for the meaning of a Collective Investment Scheme.

See STSM101020 and STSM101030 for the meaning of a unit trust.

See STSM101050 for the meaning of an OEIC.