Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Unauthorised unit trust definition

What does Unauthorised unit trust mean? A trust-based pooled investment vehicle in which investors hold units but which operates without FCA authorisation under fsma 2000. In UK practice this denotes a unit trust that is not an authorised unit trust scheme and so is not bound by the FCA’s COLL rules on eligible assets, diversification, borrowing and liquidity. Such schemes typically offer wider investment and borrowing powers and are used for specialist or institutional mandates (for example, property or alternative assets). They are, however, treated as unregulated collective investment schemes for UK purposes, so are subject to promotion and marketing restrictions (including section...

Unauthorised unit trusts: UK tax treatment of EUUTs and NEUUTs, HMRC approval requirements, income and gains, offshore unit trusts and transitional MUUTs

Published by a LexisNexis Tax expert

Practice notes

What are Unauthorised unit trust (UUTs)?

Unit trusts, as a structure, are principally employed as investment Funds for investors. An ‘unauthorised’ unit trust (UUT) is a unit trust that has not been authorised by the Financial Conduct Authority under the Financial Services and Markets Act 2000 (FSMA 2000). Unit trusts are established by Trustees holding assets on trust for unitholders. The trustees hold legal title to the fund’s assets but are obliged to apply those assets for the benefit of the unitholders. A fund manager will provide investment advice to the trustees. Interests in a unit trust may only be promoted to the UK general public (retail investors) if the unit trust has been authorised under FSMA 2000. However, to obtain authorisation under FSMA 2000 a unit trust must comply with various regulatory provisions, including restrictions on its investment powers. UUTs can therefore be used for greater investment flexibility and freedom, but at the cost that they can only be marketed to a more limited class of investors—broadly, institutional, sophisticated or high net worth investors, rather than the wider retail market. The tax rules applicable to UUTs were overhauled with effect from 6 April 2014 and are found primarily in...

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Web page updated on 22/05/2026

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