How to Transfer Mutual Funds

The only scenario in which the transfer of mutual funds from one holder to another is permitted is the investor's death.

A mutual fund transfer occurs when funds move from one unit holder to another without undergoing market redemption. This circumstance arises exclusively when mutual funds are inherited by the unit holder's nominee following the latter's demise. It is crucial to include the nominee's name in the Asset Management Company (AMC) records to ensure a smooth mutual fund unit transfer in such cases.

For transferring funds to the nominee, the fund house will need the following documents:

• The death certificate of the deceased

• A letter from the co-holder/nominee

• KYC documents of the nominee and bank account details of the claimant

If nominees have not been registered, the legal heirs of the deceased investor can submit the transfer claim. If investments have been made through a joint account, legal heirs can claim the transfer of units only if all joint holders are deceased and no nomination has been registered. In this case, the claimant will have to submit additional documents.

Transferring mutual fund units from one unit holder to another is impossible because mutual funds do not accept third-party payments. So, if you want mutual fund investments in the name of a loved one, the only way to do that is to invest in their name. This applies even to minors who have yet to attain age 18.

In this case, either of the minor's parents (father or mother) can serve as the guardian since minors lack the authority to make decisions regarding redemption and purchase of mutual fund units. The appointed guardian must furnish KYC documents and the minor's birth certificate.

It is important to note that the earnings generated from the sale of mutual funds will be combined with that of the parent with the higher income for taxation purposes. If the units are redeemed once the child turns 18, they must bear the tax liabilities.

Should you wish to gift a mutual fund investment that you currently hold to your child who is more than 18 years old or a loved one who is an adult, the only way to do so is to liquidate your investment, transfer the proceeds to their bank account, and get them to initiate a new investment. Fund houses are prohibited from receiving funds from third parties, meaning individuals who will not be the unit holders in the mutual fund. Capital gains tax incurred in the sale of mutual funds must be considered.

An Investor education and Awareness initiative of Aditya Birla Sun Life Mutual Fund

All investors have to go through a one-time KYC (Know Your Customer) process. Investors to invest only with SEBI registered Mutual Funds. For further information on KYC, list of SEBI registered Mutual Funds and redressal of complaints including details about SEBI SCORES portal, visit link : https://mutualfund.adityabirlacapital.com/Investor-Education/education/kyc-and-redressal for further details.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully

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