An agreement between the Competent Authorities of the UK and Netherlands has been signed setting out how the provisions of the Convention will apply to Pension Scheme and Charity investors in UK Common Investment Funds (CIFs).

A CIF is an arrangement whereby a number of registered pension schemes have pooled some or all of their investments into a common fund for investment purposes. The CIF must be no more than an investment agency for the assets of participating schemes. A CIF cannot be a registered pension scheme in its own right.

Charity CIFs are set up by Schemes made by the Charity Commission, operate as investment vehicles and are deemed by law to be charities themselves. They are therefore eligible for registration as charities in their own right.

The competent authorities of the Netherlands and the United Kingdom agree that a CIF is regarded as fiscally transparent in both countries. Since a CIF is fiscally transparent, all income and gains derived by the fund from the fund assets are allocated to the investors in the CIF in proportion to their participations in the CIF.