Taxation of Chargeable Gains Act 1992

[F1 Exemption for qualifying offshore CIV that is UK property rich etc U.K.

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

12 (1) An election may be made for a collective investment vehicle, or a company which is not a collective investment vehicle, to be exempt from corporation tax on chargeable gains accruing to it on— U.K.

(a) all direct disposals of UK land, and

(b) all indirect disposals of UK land.

(2) An election may be made in respect of a collective investment vehicle if each of the following entitlement conditions is met—

(a) the vehicle is offshore,

(b) the vehicle is a company (whether as a result of paragraph 4 or otherwise),

(c) the vehicle is UK property rich,

(d) the vehicle meets all of the qualifying conditions set out in paragraph 13, and

(e) if the vehicle is an AIF, it would also meet the definition of a collective investment vehicle for another reason.

(3) An election may be made in respect of a company which is not a collective investment vehicle if each of the following entitlement conditions is met—

(a) the company is wholly (or almost wholly) [F2 and directly] owned by a collective investment scheme which is constituted by two or more persons carrying on a trade or business in partnership or is constituted by a CoACS,

(b) the appropriate entity is UK property rich, and

(c) the company meets all of the qualifying conditions set out in paragraph 13,

and it does not matter where the company is resident.

[F3 (3A) In sub-paragraph (3)(a) the reference to direct ownership by a collective investment scheme is to ownership otherwise than through—

(a) a company, or

(b) a partnership, trust or other entity or arrangements.]

(4) In sub-paragraph (3)(b) the “appropriate entity” means—

(a) in a case where the collective investment scheme is constituted by two or more persons carrying on a trade or business in partnership, the company, and

(b) in a case where the collective investment scheme is constituted by a CoACS, the CoACS.

(5) If an election is made under this paragraph in respect of a collective investment vehicle—

(a) the vehicle is referred to in this Part of this Schedule as “a qualifying fund”, and

(b) any reference in this Part of this Schedule to a qualifying fund, in relation to any time after the election is made (including any time after the election ceases to have effect), is to be read as a reference to the arrangements, undertaking or company which met the definition of collective investment vehicle when the election was made.

(6) If an election is made under this paragraph in respect of a company which is not a collective investment vehicle—

(a) the company is referred to in this Part of this Schedule as “a qualifying company”, and

(b) any reference in this Part of this Schedule to a qualifying company, in relation to any time after the election is made (including any time after the election ceases to have effect), is to be read as a reference to the company.

(7) Section 103D (application of Act to tax transparent funds) does not apply for the purpose of determining whether sub-paragraph (3)(a) [F4 or (c)] applies.

(8) In this paragraph—

• “AIF” has the meaning given by regulation 3 of the Alternative Investment Fund Managers Regulations 2013, and

• “CoACS” means an authorised contractual scheme which is a co-ownership scheme.]

Textual Amendments

F2 Words in Sch. 5AAA para. 12(3)(a) inserted (with effect in accordance with reg. 1(4) 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), 9(a)

F3 Sch. 5AAA para. 12(3A) inserted (with effect in accordance with reg. 1(4) 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), 9(b)

F4 Words in Sch. 5AAA para. 12(7) inserted (24.3.2021) by The UK Property Rich Collective Investment Vehicles (Amendment of the Taxation of Chargeable Gains Act 1992) Regulations 2021 (S.I. 2021/213), regs. 1(1), 7