The distribution test applies to funds operating equalisation arrangements (ICTA 1988, Sch. 27, para. 2). Where a disposal is made out of an equalisation fund, the income accrued to the date of the disposal is treated as having been distributed (para. 2(1)). ‘Income accrued’ means the amount which would be credited to the fund’s equalisation account if, on the date of the disposal, the interest were acquired by another investor directly from the fund managers (para. 2(3)).