Taxation of Chargeable Gains Act 1992

[F1 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, F2 ...

(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[F3 , and

(e) a company (“C”) is not to be regarded as a close company only because a person possesses or is entitled to acquire the greater part of the voting power in C as a result of being—

(i) a manager of a collective investment vehicle, or

(ii) a general partner in a limited partnership which is a collective investment scheme.]

(3) A “qualifying investor” means—

(a) a person who is within any of [F4 section 528(4A)(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) [F5 the vehicle meets or, if the vehicle 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 vehicle 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 (4A) For the purposes of sub-paragraph (4), those Regulations have effect as if references to a fund included—

(a) multi-vehicle arrangements, and

(b) a collective investment vehicle which is not 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.

[F11 (12) For the purposes of this paragraph any reference to a body corporate includes—

(a) an offshore collective investment vehicle which is, as a result of paragraph 4, assumed to be a company for the purposes of this Schedule, and

(b) anything else which is, as a result of provision made elsewhere by this Act, assumed to be a company for the purposes of this Act.]]

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 Word in Sch. 5AAA para. 46(2) omitted (with effect in accordance with reg. 1(3) of the amending S.I.) by virtue of 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), 15(a)

F3 Sch. 5AAA para. 46(2)(e) and word 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), 15(a)

F4 Words in Sch. 5AAA para. 46(3)(a) substituted (22.2.2024) by Finance Act 2024 (c. 3), Sch. 7 para. 4(9) (with Sch. 7 para. 5)

F5 Words in Sch. 5AAA para. 46(4)(a) substituted (11.7.2023) by Finance (No. 2) Act 2023 (c. 30), Sch. 4 para. 1(4)(a)(i)

F6 Words in Sch. 5AAA para. 46(4)(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), 15(b)(i)

F7 Words in Sch. 5AAA para. 46(4)(b) substituted (11.7.2023) by Finance (No. 2) Act 2023 (c. 30), Sch. 4 para. 1(4)(a)(ii)

F8 Words in Sch. 5AAA para. 46(4)(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), 15(b)(ii)

F9 Words in Sch. 5AAA para. 46(4) omitted (11.7.2023) by virtue of Finance (No. 2) Act 2023 (c. 30), Sch. 4 para. 1(4)(a)(iii)

F10 Sch. 5AAA para. 46(4A) inserted (11.7.2023) by Finance (No. 2) Act 2023 (c. 30), Sch. 4 para. 1(4)(b)

F11 Sch. 5AAA para. 46(12) 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), 15(c)