Textual Amendments
F1Sch. 9A inserted (with effect in accordance with Sch. 16 para. 6 of the amending Act) by Finance Act 2021 (c. 26), Sch. 16 para. 5
7(1)For the purposes of this Schedule a company is “non-resident” in relation to a chargeable transaction if either of the following conditions is met.
(2)The first condition is that, on the effective date of the chargeable transaction, the company is not UK resident for the purposes of the Corporation Tax Acts (see Chapter 3 of Part 2 of CTA 2009).
(3)The second condition is that, on the effective date of the chargeable transaction, the company (though UK resident for the purposes of the Corporation Tax Acts)—
(a)is a close company (see paragraph 8),
(b)meets the non-UK control test in relation to the transaction (see paragraphs 9 and 10), and
(c)is not an excluded company (see paragraph 11).
(4)This paragraph is subject to—
(a)paragraph 15 (co-ownership authorised contractual schemes);
(b)paragraph 16 (alternative property finance).
8(1)For the purposes of this Schedule, a company is a “close company” if it is a close company within the meaning given by Chapter 2 of Part 10 of CTA 2010 (basic definitions), applying that Chapter subject to the following modifications.
(2)Section 444 (companies involved with close companies) applies as if condition A in that section were omitted.
(3)Section 446 (particular types of quoted company not treated as close) is treated as omitted.
9(1)For the purposes of this Schedule, a company meets the “non-UK control test” in relation to a chargeable transaction if it is a close company within the meaning given by Chapter 2 of Part 10 of CTA 2010 (basic definitions), applying that Chapter subject to the following modifications.
(2)Section 439 (“close company”) applies as if—
(a)references to a participator were to a relevant participator, and
(b)references to five or fewer participators were to any number of relevant participators.
(3)In sub-paragraph (2), “relevant participator” means a participator (within the meaning given by Chapter 2 of Part 10 of CTA 2010) who—
(a)is non-resident in relation to the chargeable transaction (within the meaning of this Schedule), and
(b)is not a general partner in a limited partnership.
(4)Section 444 (companies involved with close companies) applies as if condition A in that section were omitted.
(5)Section 446 (particular types of quoted company not treated as close) is treated as omitted.
(6)Section 451 (attribution of rights and powers) has effect subject to the limitations set out in paragraph 10.
(7)The reference in sub-paragraph (3)(b) to a general partner does not include a general partner who possesses, or is entitled to acquire, rights that entitle the general partner, in the event of the winding up of the company or in any other circumstances, to receive more than 1% of the assets of the company which would then be available for distribution among its members.
10(1)This paragraph sets out limitations on the rights and powers of a person (A) that, apart from this paragraph, would be capable of being attributed to another person (B) under section 451(4) of CTA 2010, as that provision applies for the purposes of paragraph 9(1).
(2)Where A and B are partners in a partnership, no rights and powers of A may be attributed to B under paragraph (c) or (d) of section 451(4) of CTA 2010 by virtue of that fact.
(3)Where—
(a)A and B are spouses or civil partners of each other,
(b)A and B are living together, and
(c)A is UK resident in relation to the chargeable transaction,
no rights and powers of A may be attributed to B under paragraph (c) or (d) of section 451(4) of CTA 2010 by virtue of the fact mentioned in paragraph (a).
(4)Where A’s or B’s interest in a company is de minimis, no rights and powers of A in relation to the company may be attributed to B under any of paragraphs (a) to (d) of section 451(4) of CTA 2010.
(5)For this purpose, a person’s interest in a company is “de minimis” if—
(a)the proportion of the share capital or issued share capital in the company that the person possesses or is entitled to acquire is less than 5%,
(b)the proportion of the voting rights in the company that the person possesses or is entitled to acquire is less than 5%,
(c)the issued share capital in the company that the person possesses or is entitled to acquire would, on the assumption that the whole of the income of the company were distributed among the participators, entitle the person to receive less than 5% of the income so distributed, and
(d)the person’s rights in the company entitle the person, in the event of the winding up of the company or in any other circumstances, to less than 5% of the assets of the company which would then be available for distribution among the participators.
(6)Any rights A has as a loan creditor are to be disregarded for the purposes of the assumption in sub-paragraph (5)(c).
(7)Section 1011 of the Income Tax Act 2007 (references to married persons, or civil partners, living together) applies for the purposes of this paragraph.
11(1)A company is an “excluded company” for the purposes of paragraph 7(3)(c) if it is any of the following—
(a)a PAIF;
(b)a body corporate that is a 51% subsidiary of PAIF;
(c)a company UK REIT;
(d)a company that is a member of a group UK REIT;
(e)a company acting as a trustee of a settlement.
(2)In this paragraph—
(a)“PAIF” means a body corporate that is a property AIF for the purposes of Schedule 7A to this Act by virtue of paragraph 2(2) of that Schedule;
(b)“51% subsidiary” has the same meaning as in the Corporation Tax Acts (see Chapter 3 of Part 24 of CTA 2010);
(c)“company UK REIT” has the same meaning as in Part 12 of CTA 2010 (see section 524(5) of that Act);
(d)“group UK REIT” has the same meaning as in Part 12 of CTA 2010 (see section 523(5) of that Act).]