For the purposes of distribution, an exited member is defined as a member who was invested in the portfolio as at the effective date of the distribution, but who does not have a balance at the time of processing the distribution (and therefore their portion cannot be added to or recovered from their investment).
A distribution is applied to the members’ unit balances in an investment portfolio as at the effective date of the distribution. The amount being apportioned is applicable to the amounts invested up to and including the effective date of the distribution, and is therefore applied to the balances in that portfolio as at that date.
For this reason the member’s date of exit is irrelevant.
If the member was still invested in the portfolio as at the effective date of the distribution, irrespective of his date of exit, then he is liable for the portion of the investment management fee being apportioned. Similarly, he is entitled to a dividend or surplus being apportioned.
If an exited member’s investment is realised before the effective date of the distribution, he will automatically be excluded from the distribution because his balance will be zero.
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Example |
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Date of exit |
31/03/2003 |
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Effective date of tax distribution |
31/03/2003 |
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Period for which tax is accumulated |
Month ended 31/03/2003 |
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Date of processing distribution detail |
10/04/2003 |
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Date of realisation of member’s investment |
07/04/2003 |
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Date of realisation of member’s investment |
15/04/2003 |