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CIS 8.4 Other liabilities: ICVCs and AUTs

Payment of liabilities on transfer of assets

CIS 8.4.1R
  1. (1)

    Where the property of a body corporate or of another collective investment scheme is transferred to an authorised fund (or to the depositary for the account of the authorised fund) in consideration of the issue of units in the authorised fund to shareholders in that body corporate or to holders in that other scheme, (2) applies.

  2. (2)

    The ICVC (or its depositary) or the trustee of the AUT as the successor in title to the property transferred, may pay out of the scheme property any liability arising after the transfer which, had it arisen before the transfer, could properly have been paid out of the property transferred, but only if:

    1. (a)

      there is nothing in the instrument constituting the scheme of the authorised fund expressly forbidding the payment; and

    2. (b)

      the directors of the ICVC, or the manager of the AUT, are, or is, of the opinion that proper provision was made for meeting such liabilities as were known or could reasonably have been anticipated at the time of the transfer.


CIS 8.4.2R

The restrictions contained in this chapter do not affect any liability for any value added or similar tax related to a charge or expense, but any notice given in accordance with this chapter and any statement in a prospectus relating to any charge or expense payable out of the scheme property or by any shareholder or potential shareholder must, if the person liable for the charge or expense may also be liable for such tax, contain a statement to this effect.