Taxation of Chargeable Gains Act 1992

[F1 13 (1) For the purposes of paragraph 12(2), a collective investment vehicle meets the qualifying conditions in this paragraph at any time if, at that time— U.K.

(a) it is a collective investment scheme and it meets the genuine diversity of ownership condition,

[F2 (ab) it is a collective investment scheme, it meets the UK tax condition and it is wholly (or almost wholly) owned by one or more other collective investment schemes each of which meets the genuine diversity of ownership condition,]

(b) it is a company (otherwise than as a result of paragraph 4) and it meets the recognised stock exchange condition and the non-close condition, or

(c) it is a collective investment vehicle (of any kind) and it meets the UK tax condition and the non-close condition.

(2) For the purposes of paragraph 12(3), a company which is not a collective investment vehicle meets the qualifying conditions in this paragraph at any time if, at that time, either—

(a) the company meets the UK tax condition and the non-close condition, or

[F3 (b) the collective investment scheme directly owning the company—

(i) meets the genuine diversity of ownership condition, or

(ii) is wholly (or almost wholly) and directly owned by one or more qualifying partnerships each of which meets the genuine diversity of ownership condition,]

[F4 (2A) In sub-paragraph (2)(b)—

(a) references to direct ownership are to ownership otherwise than through—

(i) a company, or

(ii) a partnership, trust or other entity or arrangements, and

(b) “qualifying partnership” means a collective investment scheme which is constituted by two or more persons carrying on a trade or business in partnership.]

(3) For the purposes of this paragraph a collective investment scheme meets the genuine diversity of ownership condition at any time if, at that time—

(a) [F5 the scheme meets or, if the scheme is part of multi-vehicle arrangements, the arrangements meet] [F6 the conditions in regulation 75(2), (3), and (4)(a)] of the Offshore Funds (Tax) Regulations 2009, or

(b) [F7 the scheme meets, or those multi-vehicle arrangements meet,] the condition in regulation 75(5) of those Regulations [F8 (assuming for this purpose that regulation 75(4)(b) is omitted)],

F9 ...

[F10 (3A) For the purposes of sub-paragraph (3), those Regulations have effect as if references to a fund included—

(a) multi-vehicle arrangements, and

(b) a collective investment scheme which is not an offshore fund.]

(4) For the purposes of this paragraph a company meets the recognised stock exchange condition at any time if, at that time—

(a) it has ordinary share capital, and

(b) the shares forming part of its ordinary share capital are regularly traded on a recognised stock exchange.

(5) For the purposes of this paragraph a company meets the non-close condition at any time if, at that time, it—

(a) is not a close company, or

(b) is a close company but only because it has a qualifying investor as a direct or indirect participator.

(6) Paragraph 46 (meaning of “close company”, “qualifying investor” and “direct or indirect participator”) applies for the purposes of sub-paragraph (5).

(7) For the purposes of this paragraph a company meets the UK tax condition at any time if, on the assumption that all of the shares in it were disposed of for their market value at that time, the person making the election reasonably considers at that time that, as a result solely of double taxation arrangements, no more than 25% of the total proceeds would fall to be left out of account for the purposes of this Act.

[F11 (8) If any of the proceeds arise to a company which is wholly (or almost wholly) owned by one or more investors to which paragraph 33 applies, the company is to be treated for the purposes of sub-paragraph (7) as if it were exempt from corporation tax in respect of chargeable gains accruing to it otherwise than as a result of double taxation arrangements.]]

Textual Amendments

F1 Sch. 5AAA inserted (with effect in accordance with Sch. 1 paras. 120, 123 of the amending Act) by Finance Act 2019 (c. 1), Sch. 1 para. 21

F2 Sch. 5AAA para. 13(1)(ab) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The UK Property Rich Collective Investment Vehicles (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations 2020 (S.I. 2020/315), regs. 1(1), 10(a)

F3 Sch. 5AAA para. 13(2)(b) substituted (with effect in accordance with reg. 1(3) of the amending S.I.) by The UK Property Rich Collective Investment Vehicles (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations 2020 (S.I. 2020/315), regs. 1(1), 10(b)

F4 Sch. 5AAA para. 13(2A) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The UK Property Rich Collective Investment Vehicles (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations 2020 (S.I. 2020/315), regs. 1(1), 10(c)

F5 Words in Sch. 5AAA para. 13(3)(a) substituted (11.7.2023) by Finance (No. 2) Act 2023 (c. 30), Sch. 4 para. 1(3)(a)(i)

F6 Words in Sch. 5AAA para. 13(3)(a) substituted (with effect in accordance with reg. 1(3) of the amending S.I.) by The UK Property Rich Collective Investment Vehicles (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations 2020 (S.I. 2020/315), regs. 1(1), 10(d)(i)

F7 Words in Sch. 5AAA para. 13(3)(b) substituted (11.7.2023) by Finance (No. 2) Act 2023 (c. 30), Sch. 4 para. 1(3)(a)(ii)

F8 Words in Sch. 5AAA para. 13(3)(b) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The UK Property Rich Collective Investment Vehicles (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations 2020 (S.I. 2020/315), regs. 1(1), 10(d)(ii)

F9 Words in Sch. 5AAA para. 13(3) omitted (11.7.2023) by virtue of Finance (No. 2) Act 2023 (c. 30), Sch. 4 para. 1(3)(a)(iii)

F10 Sch. 5AAA para. 13(3A) inserted (11.7.2023) by Finance (No. 2) Act 2023 (c. 30), Sch. 4 para. 1(3)(b)

F11 Sch. 5AAA para. 13(8) inserted (with effect in accordance with reg. 1(3) of the amending S.I.) by The UK Property Rich Collective Investment Vehicles (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations 2020 (S.I. 2020/315), regs. 1(1), 10(e)