CG41580 | Open-ended investment companies (OEICs): umbrella OEICs

An umbrella OEIC is an OEIC which is split into a number of separately pooled funds ofassets, known as the sub-funds (or parts) of the umbrella company. This definition is atICTA88/S468A (4) and is adopted for the purposes of the OEICs tax regime by SI2006/964regulation 7. Regulation 106 imports the same definition into TCGA 1992 by inserting a newsection 99AA into that Act.

An umbrella OEIC is not treated as a company for tax purposes. It is entirely transparent.Each separate sub-fund of the umbrella company is instead regarded as an OEIC in its ownright, with the assets which relate to that pool of investments constituting the deemedOEIC’s assets (except where the context requires otherwise).

A holder of shares in the umbrella company is deemed to be the owner of shares in thedeemed OEIC which is the sub-fund in which the holder has rights for the time being. Thoserights can be exchanged for rights in another sub-fund of the umbrella company, seeCG57760.

Such an exchange will represent a disposal and a separate acquisition for TCGA purposesand so may give rise to a chargeable gain or loss.

This approach to umbrella companies and their parts did not change when SI2006/964 cameinto force.