[F1Unlisted trading company exceptionU.K.
31A.—(1) No liability to tax arises under regulation 17 if conditions A to D are met.
(2) Condition A is that the disposal is a disposal of an interest in an offshore fund.
(3) Condition B is that the sole or main purpose of the fund is to invest in qualifying companies.
(4) Condition C is that throughout the period starting with the date on which the interest was acquired and ending 12 months before the date of the disposal the fund met the investment condition.
This is subject to paragraph (6).
(5) Condition D is that participants in the fund have access to, and are able to obtain copies of, sufficient information to demonstrate that the fund intends to dispose of any holdings of shares or securities within regulation 31B(1)(b) or (d).
(6) Condition C is treated as met in relation to the period—
(a)starting at the beginning of the first period of account of the fund, and
(b)ending on the earlier of—
(i)the expiry of 3 months, and
(ii)the date the fund meets the investment condition,
if the only asset of the fund during that period is cash.
(7) For the purposes of this regulation and regulation 31B—
“cash” means cash deposited in a bank account or similar account, but not cash acquired wholly or partly for the purpose of realising a gain on its disposal;
“qualifying company” means a trading company or the holding company of a trading group or a trading subgroup, where—
the shares of the company are not listed on a recognised stock exchange or admitted to trading on a regulated market, and
the activities of the trading company or, in the case of a holding company, the activities of the members of the group or subgroup taken together, do not include to a substantial extent the carrying out of investment transactions undertaken in the course of a trade.
(8) In paragraph (7) in the definition of “qualifying company”, “holding company”, “trading company”, “trading group” and “trading subgroup” have the same meanings as in Schedule 7AC to TCGA 1992 (see paragraphs 20 to 24 and 26 and 27 of that Schedule).]
Textual Amendments
F1Regs. 31A-31C inserted (with effect in accordance with reg. 1(2) of the amending S.I.) by The Offshore Funds (Tax) (Amendment) Regulations 2011 (S.I. 2011/1211), regs. 1(1), 19