Finance Act 2003

[F1 [F2 Meaning of “non-qualifying individual” U.K.

Textual Amendments

F1 Sch. 4A inserted (with effect in accordance with Sch. 35 para. 10 of the amending Act) by Finance Act 2012 (c. 14), Sch. 35 para. 4

F2 Sch. 4A paras. 5A-5K and cross-headings inserted (with effect in accordance with Sch. 40 para. 8 of the amending Act) by Finance Act 2013 (c. 29), Sch. 40 para. 2(4)

5A (1) In paragraph 5 “non-qualifying individual”, in relation to a chargeable transaction, means any of the following— U.K.

(a) the purchaser (other than a purchaser entering into the transaction as a member of a partnership);

(b) a purchaser who enters into the transaction as a member of a partnership and has a major share in the partnership,

(c) an individual (a “connected person”) who is connected with the purchaser;

(d) a relevant settlor;

(e) the spouse or civil partner of a connected person or of a relevant settlor;

(f) a relative of a connected person or of a relevant settlor, or the spouse or civil partner of a relative of a connected person or of a relevant settlor;

(g) a relative of the spouse or civil partner of a connected person or of a relevant settlor;

(h) the spouse or civil partner of a person falling within paragraph (g);

(i) an individual who is a major participant in a relevant collective investment scheme or is connected with a major participant in a relevant collective investment scheme.

(2) A member of a partnership has a “major share” in the partnership if the member is entitled to a 50% or greater share—

(a) in the income profits of the partnership, or

(b) in the partnership's assets.

(3) A collective investment scheme is a “relevant collective investment scheme” for the purposes of sub-paragraph (1)(i) if the purchaser under the chargeable transaction referred to in that sub-paragraph acquires the subject-matter of the transaction for the purposes of that scheme.

(4) An individual who participates in a collective investment scheme is a “major participant” in the scheme if the individual—

(a) is entitled to a share of at least 50% either of all the profits or income arising from the scheme or of any profits or income arising from the scheme that may be distributed to participants, or

(b) would in the event of the winding up of the scheme be entitled to 50% or more of the assets of the scheme that would then be available for distribution among the participants.

(5) The reference in sub-paragraph (4)(a) to profits or income arising from a collective investment scheme is to profits or income arising from the acquisition, holding, management or disposal of the property subject to the scheme.

(6) In this paragraph—

• “participant”, in relation to a collective investment scheme, is to be read in accordance with section 235 of the Financial Services and Markets Act 2000;

• “relative” means brother, sister, ancestor or lineal descendant;

• “relevant settlor”, in relation to a chargeable transaction, means an individual who is a settlor in relation to a relevant settlement (as defined in sub-paragraph (7));

• “settlement” has the same meaning as in Chapter 5 of Part 5 of ITTOIA 2005 (see section 620 of that Act).

(7) Where a person, in the capacity of trustee of a settlement, is connected with a person who is the purchaser under a chargeable transaction, that settlement is a “relevant settlement” in relation to the chargeable transaction.

(8) In sub-paragraph (7) “trustee” is to be read in accordance with section 1123(3) of CTA 2010 (“connected persons”: supplementary).

(9) In this paragraph “the purchaser”, in relation to a chargeable transaction, is to be read as a reference to any of the purchasers (if there are more than one).

(10) Section 1122 of the Corporation Tax Act 2010 (connected persons) has effect for the purposes of this paragraph, but for those purposes—

(a) subsections (7) and (8) of that section (application of rules about connected persons to partnerships) are to be disregarded, and

(b) subsections (2) to (7) of section 172 of the Finance Act 2013 apply as they apply for the purposes of Part 3 of that Act.]]