Prospectus Of Clerical Medical Open Ended Investment Company ...

an alternative to arranging for the distribution of income, either (a) carry forward such income
to the next accounting period, or (b) credit such income to capital.
The Company is entitled to reclaim any distribution which has been unclaimed for a period of
six years from the date payment was due.
Determination of distributable income
The income available for distribution in relation to a Fund is determined in accordance with
the Company’s Instrument of Incorporation. Broadly it comprises all sums deemed by the
Company, after consultation with the auditor, to be in the nature of income received or
receivable, and deducting the ACD'S best estimate of any tax charge on income, for the
account of the Company and attributable to the Fund in respect of the accounting period
concerned, after deducting net charges and expenses paid or payable out of such income in
respect of the period. The ACD then adds its best estimate of any relief from tax on such
charges and expenses and makes such adjustments as it considers appropriate, after
consulting the auditors in accordance with the COLL Sourcebook, in relation to taxation and
other matters.
Income equalisation
The price of a share of a particular class in a Fund is based on the value of the relevant Fund
attributable to that share class including the income of the Fund since the previous
distribution or, in the case of accumulation shares, deemed distribution. In the case of the
first distribution received or accumulation made in respect of a share, part of the amount,
namely the equalisation payment, is a return of capital. For individual shareholders subject
to UK taxation, it is not taxable as income but this amount is, however, deducted from the
cost of the share in computing any chargeable gains. For UK resident corporate
shareholders, any equalisation on dividend distributions/accumulations is deducted from the
cost of the share in computing any chargeable gain. For UK resident corporate
shareholders, any equalisation on interest distributions/accumulations is deducted from the
cost of the share for loan relationship purposes. In addition, for all accumulation shares, the
equalisation payment is accumulated as part of the total amount accumulated. This total is
normally added to the cost of the share.
Equalisation applies only to shares purchased during the relevant accounting period. It is
calculated as the average amount of income included in the issue price of all shares of the
Fund concerned issued during the period.
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