Finance Act 1999

12 (1) Section 99 of the Finance Act 1986 (general interpretation provisions) is amended as follows. U.K.

(2) In subsection (5) (securities excepted from being chargeable securities), in paragraph (a), after “securities” insert “ falling within paragraph (a), (b) or (c) of subsection (3) above ”.

(3) After that subsection insert—

“(5A) “Chargeable securities” does not include a unit under a unit trust scheme if—

(a) all the trustees under the scheme are resident outside the United Kingdom and the unit is not registered in a register kept in the United Kingdom by or on behalf of the trustees under the scheme; or

(b) under the terms of the scheme the trust property can only be invested in exempt investments.

(5B) For the purposes of subsection (5A)(b)—

(a) an investment other than an interest under a collective investment scheme is an exempt investment if, and only if—

(i) it is not an investment on the transfer of whichad valorem stamp duty would be chargeable, and

(ii) it is not a chargeable security;

(b) an interest under a collective investment scheme is an exempt investment if, and only if, the scheme is an authorised unit trust scheme or an open-ended investment company and under the terms of the scheme the property subject to the scheme—

(i) cannot be invested in such a way that income can arise to the trustees or the company that will be chargeable to tax in their hands otherwise than under Case III of Schedule D, and

(ii) can only be invested in exempt investments;

(c) a derivative is an exempt investment if, and only if, it relates wholly to one or more exempt investments; and

(d) funds held for the purposes of the day to day management of the unit trust scheme are not regarded as investments.

In this subsection “authorised unit trust scheme”, “collective investment scheme” and “open-ended investment company” have the same meaning as in the Financial Services Act 1986.”.

(4) For subsection (9) (meaning of “unit” and “unit trust scheme”) substitute—

“(9) “Unit trust scheme” and related expressions have the meanings given by Part IV of Schedule 19 to the Finance Act 1999.”.