INTM269076 | Non-residents trading in the UK: through UK investment managers, brokers or Lloyd’s agents: investment managers: "investment transaction": transactions in units in collective investment schemes

This page is for chargeable periods beginning before 1 January 2026. For chargeable periods beginning on or after 1 January 2026 the investment manager exemption defines “investment transactions” by exception, rather than by reference to the Investment Transaction Regulations. See INTM269070 for more details

What is a collective investment scheme?

Regulation 5 of the Investment Manager (Investment Transactions) Regulations 2014 admits transactions in units in a collective investment scheme.

The definition of ‘collective investment scheme’ is at S.235 of the Financial Services and Markets Act 2000 (FSMA). The definition is widely drawn and encompasses any arrangements under which participants share in, or receive profits or income arising from the acquisition, holding, management or disposal of any property (whether the participants become the owners of the property or otherwise). The arrangements must also be such that:

• The participants do not have day-to-day control over the management of the property; and the arrangements must have either or both of the following characteristics

• The contributions of the participants and the profits or income out of which payments are made are pooled; or

• The property is managed as a whole by or on behalf of the scheme operator.

This definition can encompass arrangements such as unit trust schemes, contractual arrangements such as Common Contractual Funds (CCFs) and Fonds Commun de Placement (FCPs), and partnerships, whether incorporated or unincorporated.

The term ‘units’ is also given a wide definition and means the rights or interests of the participants in a collective investment scheme, however those rights or interests are described. Rights under a contractual arrangement such as an FCP, for example, are within the meaning of ‘units’ in regulation 5, as are membership interests in a partnership, as well as interests actually represented by the issue of units (as in the case of a unit trust).

For the purposes of regulation 5, no account is taken of the transparency or opacity of the vehicle by virtue of which the arrangements subsist. Provided the transaction is in rights or interests in a collective investment scheme meeting the requirements of regulation 5, it is an ‘investment transaction’ for the purposes of the Investment Manager Exemption (IME).