STSM107130 | Collectives: contributions, mergers and other matters: fund supermarkets - switching

Many fund supermarkets allow investors to switch their interest in units or shares held in one underlying third party unit trust or Open-Ended Investment Company (OEIC) to another that is linked to the supermarket.

All that is required is a single on-line instruction from the investor to the fund supermarket. In turn, the supermarket will notify the relevant fund manager of the quantity of units/OEIC shares to be surrendered and, send a separate instruction to the other fund manager advising of the quantity of units/OEIC shares to be issued.

Where the transaction is undertaken prior to 30 March 2014 this enables the respective managers of each of the underlying funds to include the quantity of units/OEIC shares either surrendered or issued to be included in their Stamp Duty Reserve Tax (SDRT) FA99/SCH19 monthly computation.

For transactions effected on or after 30 March 2014, provided the fund supermarket notifies the relevant fund managers of the gross surrender and gross issue, there will be no FA86/S87 SDRT charge due to the FA86/S90(1) exemption.

See STSM101020 for the meaning of a unit trust.

See STSM101050 for the meaning of an OEIC.

See STSM103005 for information on the abolition of FA99/SCH19 with effect from 30 March 2014.