Taxation of Chargeable Gains Act 1992

[F1 PART 6 U.K. General

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

Meaning of “close company”, “qualifying investor” and “direct or indirect participator” U.K.

46 (1) This paragraph has effect for the purposes of the provisions of this Schedule which apply this paragraph (or to which this paragraph is applied). U.K.

(2) Whether a company is “a close company” is determined in accordance with the rules in Chapter 2 of Part 10 of CTA 2010 but subject to the following modifications—

(a) section 442(a) (non-UK resident companies) is to be treated as omitted,

(b) section 444 (companies involved with non-close companies) is to be treated as omitted,

(c) section 447(1)(a) (shares in quoted companies beneficially held by non-close companies) is to be treated as omitted, and

(d) for the purposes of any attribution under section 451(4) (rights of a person's associates to be attributed to the person etc in determining “control”) the rights and powers of a person (“A”) are not to be attributed to another person (“P”) merely because A is a partner of P.

(3) A “qualifying investor” means—

(a) a person who is within any of section 528(4A)(a), (b), (c), (i) or (j) of CTA 2010 where, if the collective investment vehicle mentioned in the provision concerned is a company, it meets the non-close condition or, if not, the vehicle meets the genuine diversity of ownership condition,

(b) a person who is within any other provision of section 528(4A) of that Act, or

(c) a qualifying fund or qualifying company in respect of which an election under paragraph 12 has effect.

(4) For the purposes of sub-paragraph (3)(a) a collective investment vehicle meets the genuine diversity of ownership condition at any time if, at that time—

(a) it meets conditions A to C of regulation 75 of the Offshore Funds (Tax) Regulations 2009, or

(b) it meets the condition in regulation 75(5) of those Regulations,

and those Regulations apply for the purposes of this sub-paragraph as if any collective investment vehicle which is not an offshore fund were regarded as an offshore fund.

(5) For the purposes of sub-paragraph (3)(a) 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,

applying the provisions of this paragraph for the purposes of this sub-paragraph.

(6) A person is a “direct participator” if the person is a participator for the purposes of Part 10 of CTA 2010 (see section 454).

(7) A person is an “indirect” participator in a company if the person has a share or interest in the capital or income of the company through another body corporate or other bodies corporate.

(8) The reference here to having a share or interest in the capital or income of a company through a body corporate is to be read as follows.

(9) Suppose that 3 or more bodies corporate are ordered in a series such that each body in the series (other than the last) has a share or interest in the capital or income of the body immediately below it in the series.

(10) If B is a body that is below, but not immediately below, A in the series, A is said to own a share or interest in the capital or income of B through each body corporate that is between A and B in the series.

(11) A person is regarded for the purposes of sub-paragraphs (7) to (10) as having a share or interest in the capital or income of a company if the person would be a participator in the company as a result of section 454(2) of CTA 2010.

Other definitions U.K.

47 (1) In this Schedule— U.K.

• “double taxation arrangements” means arrangements having effect under section 2(1) of TIOPA 2010,

• “interest in UK land” is to be read in accordance with section 1C,

• “the manager”, in relation to a collective investment vehicle, means—

  (a)

  any person who is the manager of the property that is the subject of or held by the vehicle, or

  (b)

  any other person who has, or is expected to have, day-to-day control of that property, and

• “prospectus”, in relation to a collective investment vehicle, means any document (however described) which is made available to investors and which sets out descriptions of the investments to be made, or intended to be made, by the vehicle.

(2) For the purposes of this Schedule—

(a) a reference to a direct disposal of UK land is to a disposal of an interest in UK land, and

(b) a reference to an indirect disposal of UK land is to a disposal of an asset deriving at least 75% of its value from UK land.

(3) For this purpose the reference to a disposal of an asset deriving at least 75% of its value from UK land is to be read in accordance with Part 2 of Schedule 1A.

Power to make provision in relation to UK property rich collective investment vehicles etc U.K.

48 (1) The Treasury may by regulations make provision for the purposes of any provision of this Act in relation to— U.K.

(a) collective investment vehicles that are UK property rich, or

(b) investments made (directly or indirectly) by collective investment vehicles in companies that are UK property rich.

(2) Among other things, the regulations—

(a) may amend any provision made by this Schedule, or

(b) may disapply any provision made by or under this Act or provide for any provision made by or under this Act to have effect with modifications specified in the regulations.

(3) The regulations may make provision having effect in relation to times before the regulations are made.

(4) The regulations—

(a) may make different provision for different purposes, and

(b) may make supplementary, incidental, consequential or transitional or saving provision.]