Taxation (International and Other Provisions) Act 2010 section 356

Meaning of "mutual fund"

Section 356 defines what constitutes a "mutual fund" for the purposes of the offshore funds rules, by setting out three conditions that must all be met.

• A mutual fund is any arrangement relating to property (including money) that satisfies three conditions: the arrangement enables participants to share in the property or its returns (Condition A), participants lack day-to-day management control (Condition B), and investors can reasonably expect to realise their investment by reference to net asset value or an index (Condition C).
• Participants are not treated as having day-to-day control merely because they have a right to be consulted about the management of the property or to give directions regarding it.
• The definition is subject to specific exceptions set out elsewhere in the legislation, and to special rules for umbrella arrangements and arrangements with more than one class of interest.
• The Treasury has the power to amend Condition C by regulations, but only with the prior approval of the House of Commons.