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2(1)In section 527 (being a UK REIT in relation to an accounting period)—
(a)in subsection (2)(aa), at the end insert “(but see subsection (3A))”;
(b)in subsection (3)(aa), at the end insert “(but see subsection (3A))”;
(c)after subsection (3) insert—
“(3A)Subsections (2)(aa) and (3)(aa) do not apply in relation to a period, or to any part of a period, in respect of which condition C in section 528 is met as a result of subsection (3)(b) of that section.”
(2)In section 528 (conditions for company)—
(a)in subsection (3)—
(i)the words from “the shares” to the end become paragraph (a), and
(ii)after that paragraph insert “, or
(b)at least 70% of the shares forming the company’s ordinary share capital are owned by one or more institutional investors (see sections 528ZA and 528ZB).”;
(b)after subsection (3) insert—
“(3A)Subsection (3B) applies where condition C ceases to be met in relation to a company UK REIT or the principal company of a group UK REIT as a result of subsection (3)(b) ceasing to apply in relation to that company.
(3B)The company is to be treated as if condition C continued to be met in relation to that company as a result of that subsection for the period of 12 months beginning with the day on which this subsection begins to apply.”;
(c)in subsection (4A)(j) omit “, under the law of that territory,”.
(3)After section 528 insert—
(1)This section applies for the purposes of section 528(3)(b) (listing requirement where at least 70% of shares are owned by institutional investors).
(2)A person “owns” ordinary share capital if the person owns it—
(a)directly,
(b)indirectly, or
(c)partly directly and partly indirectly.
(3)Sections 1155 to 1157 (meaning of “indirect ownership” and calculation of amounts owned indirectly) apply for the purposes of subsection (2).
(4)For the purposes of sections 1155 to 1157 as applied by subsection (3), treat references to a body corporate as including—
(a)an exempt unauthorised unit trust,
(b)anything which is included in references to a body corporate for the purposes of paragraph 46 of Schedule 5AAA to the TCGA 1992 (UK property rich collective investment vehicles etc) (see sub-paragraph (12) of that paragraph), and
(c)an authorised contractual scheme which is a co-ownership scheme,
and, in relation to an entity within paragraph (a), (b) or (c), references to ordinary share capital are to be treated as references to units or other corresponding interests in the entity concerned.
(5)A person is also to be regarded as owning ordinary share capital in a company in circumstances where the person would be regarded as holding shares in a company under paragraphs 12 and 13 of Schedule 7AC to TCGA 1992 (exemptions for disposals by companies with substantial shareholding).
(6)Where the assets of a partnership include ordinary share capital of a company, each partner is to be regarded as owning a proportion of that share capital equal to the partner’s proportionate interest in that ordinary share capital.
(7)But subsection (6) does not apply in relation to a limited partnership which is a collective investment scheme as mentioned in section 528(4A)(c) at any time when the partnership meets the genuine diversity of ownership condition (see section 528ZB(2)).
(8)In subsection (4)—
“authorised contractual scheme” and “co-ownership scheme” have the meanings given by sections 237(3) and 235A, respectively, of FISMA 2000;
“exempt unauthorised unit trust” has the same meaning as in the Unauthorised Unit Trusts (Tax) Regulations 2013 (S.I. 2013/2819).
(1)For the purposes of section 528(3)(b) (listing requirement where at least 70% of shares are owned by institutional investors), where shares are owned by a person acting on behalf of a limited partnership which is a collective investment scheme as mentioned in section 528(4A)(c), the person is to be treated as an institutional investor only if the collective investment scheme meets the genuine diversity of ownership condition.
(2)A collective investment scheme meets the genuine diversity of ownership condition at any time if, at that time, it meets—
(a)the conditions in regulation 75(2), (3) and (4)(a) of the Offshore Funds (Tax) Regulations 2009 (S.I. 2009/3001), or
(b)the condition in regulation 75(5) of those Regulations (assuming for this purpose that regulation 75(4)(b) is omitted),
and those Regulations apply for the purposes of this subsection as if any collective investment scheme which is not an offshore fund were regarded as an offshore fund.
(3)For the purposes of determining whether a collective investment scheme meets the genuine diversity of ownership condition as mentioned in subsection (2), the fact that (for any reason) the capacity of the vehicle to receive investments is limited does not prevent regulation 75(3) of the Offshore Funds (Tax) Regulations 2009 (including as it applies for the purposes of regulation 75(5) of those Regulations) from being met.
(4)Subsection (3) does not apply if—
(a)the limited capacity of the scheme to receive investments is fixed by the documents of the vehicle (or otherwise), and
(b)a pre-determined number of specific persons, or specific groups of connected persons, make investments in the vehicle that collectively exhaust all, or substantially all, of that capacity.
(5)For the purposes of determining whether a collective investment scheme constituted before 1 April 2022 meets the genuine diversity of ownership condition as mentioned in subsection (2), it is to be assumed that regulation 75(2) of the Offshore Funds (Tax) Regulations 2009 (including as it applies for the purposes of regulation 75(5) of those Regulations) has effect as if it referred to a statement prepared by the manager of the scheme, available to HMRC, which—
(a)specifies the intended categories of investor when the scheme was marketed,
(b)confirms that the interests in the scheme were made widely available, and
(c)confirms that interests in the scheme were marketed and made available in accordance with the requirements of regulation 75(4)(a) of those Regulations (and that provision is to be read accordingly).”
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