SolvedIFM09130 | Introduction: summary of tax treatment
From HM Revenue & Customs · Investment Funds Manual
A RIF is not a legal person. It is a contractual co-ownership collective investment scheme, operated by an operator who makes investments on behalf of the participants in accordance with the scheme arrangements. It is not subject to UK direct taxes on the income or gains it generates, provided it meets and continues to meet the RIF conditions.
A RIF is transparent for income purposes: each participant is taxable on their share of the RIF’s income as it arises, according to the nature of that income and the participant’s own tax status (IFM09310). The capital gains treatment is different: participants are treated as holding units in the RIF, and the rules on chargeable gains are explained at IFM09320 onwards.