SolvedIFM04370 | AIFs: Property authorised investment funds (PAIFs): tax treatment of PAIFs and distributions: attribution of distributions
From HM Revenue & Customs · Investment Funds Manual
Attribution of distributions (regulation 69Z14 SI 2006/964)
In accordance with the principles explained at IFM04110 distributions made by a PAIF must be split into three pools for distribution:
A property income distribution (PID) of net income from the tax-exempt business;
PAIF distribution (interest); and
PAIF distributions (dividends).
The third amount will not necessarily correspond exactly to the amount received by the PAIF in UK dividends: any differences between the accounting income of the tax-exempt part of the business and the net income calculated according to regulation 69Z1 SI2006/964 will be reflected here. See IFM04372 and IFM04374 for examples.
Each distribution payment is treated as being made on the distribution date by the PAIF to the investors in proportion to their rights.
Vouchers
When a distribution is made, the PAIF must provide statements showing the gross amount of each allocation, any tax deducted and the net amount paid or, in the case of a PAIF distribution (dividend), the dividend amount (see IFM04430).
Distributions made after leaving the regime (regulation 69Z21 SI 2006/964)
In the event that a PAIF leaves the regime, then the rules above apply to any distributions made after the end of the final accounting period as a PAIF in respect of the income of that accounting period.