Aberdeen Investment Funds ICVC - Aberdeen Asset Management

Taxation
GENERAL
The information given under this heading does not constitute legal tax advice and prospective investors should consult their own
professional advisers as to the implications of subscribing for, purchasing, holding, switching or disposing of Shares under the laws of
the jurisdiction in which they may be subject to tax.
THE COMPANY
As the Funds are sub-funds of an open-ended investment company to which The Open-Ended Investment Companies (Tax)
Regulations 1997 apply, the Funds are exempt from UK tax on capital gains realised on the disposal of investments held within them.
Dividends from UK companies are received by a Fund with a tax credit and no further tax is payable by the Fund on that income.
Income received by a Fund from transactions in futures or options contracts is exempt from tax. The Funds will each be subject to
corporation tax at 20% on other types of income but after deducting allowable expenses (which include the gross amount of any
interest type distributions made).
SHAREHOLDERS’ INCOME
The type of distribution made by a Fund will depend on its investments.
Other than the Aberdeen Asian Bond Fund A , Aberdeen Corporate Bond Fund, Aberdeen Cash Fund, Aberdeen Emerging Markets
Bond Fund, Aberdeen High Yield Bond Fund and Aberdeen UK Gilts Fund , all the Funds will pay dividend distributions. UK resident
Shareholders who receive dividend distributions will be treated as having received a dividend with a 10% income tax credit attached
to it. This tax credit will satisfy the income tax liability of Shareholders subject to lower (10%) or basic (22%) rate tax. Shareholders
liable to income tax at the Schedule F upper rate of 32.5% will be liable to pay further tax at 22.5% of the aggregate of the dividend
plus the tax credit.
Aberdeen Asian Bond Fund A , Aberdeen Corporate Bond Fund, Aberdeen Cash Fund, Aberdeen Emerging Markets Bond Fund,
Aberdeen High Yield Bond Fund and Aberdeen UK Gilts Fund A are interest schemes for tax purposes and the following applies to
them. The rate of corporation tax payable by the funds is 20%. Income allocations to shareholders will be interest allocations, with
income tax deducted at the rate of 20% from the gross allocation. For individual shareholders, the gross interest allocation will
be subject to UK income tax at the appropriate marginal rate of tax for the individual whether 10%, 22% or 40%. The income tax
deducted at source can be used to reduce the tax liability. A shareholder liable to tax at the basic rate will have no further tax to pay
whilst a shareholder taxable at the higher rate will be liable to further tax equal to 20% of the gross interest. UK residents who are
non taxpayers or lower rate tax-payers may reclaim all or part of the income tax deducted at source. These sub-funds will not invest
in the shares of Real Estate Investment Trusts (REIT) if this would affect their status as interest schemes, or distributions as interest
distributions.
Corporate Shareholders who receive distributions may have to split them (the division will be indicated on the tax voucher). Any
part representing dividends received from a UK company will be treated as dividend income (that is franked investment income)
and no further tax will be due on it. The remainder will be received as an annual payment after deduction of income tax at the lower
rate and corporate Shareholders may be liable to corporation tax on the grossed up amount with the benefit of the 20% income tax
credit attached.
Distributions and proceeds on redemption from a UCITS fund may be reportable or subject to withholding tax in accordance with
Council Directive 2003/48/EC, the EU Savings Directive (‘the Directive’). The Aberdeen Investment Funds ICVC is a UCITS fund for
the purposes of the Directive. Under the terms of this directive, the Manager must provide details of interest payments made to
UK residents and to residents in certain other prescribed countries. This information will be exchanged automatically with the tax
authorities in those countries. Only savings income payments are reportable or subject to withholding tax. Distributions are savings
income payments if a fund holds more than 15% of its assets in “eligible money debts” and proceeds on redemption are savings
income payments if a fund holds more than 40% of its assets in eligible money debts.
It should be noted that this is for information purposes only. Responsibility for compliance with the Directive remains that of the
‘paying agent’ as defined by the Directive. The calculation is based on the UK interpretation of the rules.
52 Aberdeen Investment Funds ICVC Prospectus November 2011