This two-part article examines whether or not an extension of the rationale of the Merger Directive (2009) could be used to achieve tax neutrality in regard to cross-border mergers of UCITS in terms of the UCITS IV Directive. Part 1 analyses the UCITS IV regime, the Merger Directive and the various prototypes/mechanisms that may be used by states in the design of their domestic investment fund taxation systems. Part 2 analyses the taxable events that may arise in relation to a transaction.