Part 6Relationships treated as loan relationships etc

Chapter 3OEICs, unit trusts and offshore funds

The qualifying investments test

495Qualifying holdings

(1)

For the purposes of section 494(1)(d) a holding in an open-ended investment company, a unit trust scheme or an offshore fund is a qualifying holding at any time if—

(a)

at that time, or

(b)

at any other time in the relevant accounting period,

the company, scheme or fund would itself fail to meet the qualifying investments test, even on the assumption in subsection (2).

(2)

The assumption is that investments of the company, scheme or fund are qualifying investments in relation to the company, scheme or fund only if they are within section 494(1)(a), (b), (c), (e), (f), (g) or (h).

(3)

In this section “holding”—

(a)

in relation to an open-ended investment company, means—

(i)

except where sub-paragraph (ii) applies, shares in the company, and

(ii)

in a case where under F1section 615(3) of CTA 2010 part of an umbrella company is regarded as an open-ended investment company, rights in the separate pool in question,

(b)

in relation to a unit trust scheme, means an entitlement to a share in the investments of the scheme, and

(c)

in relation to an offshore fund, means—

(i)

shares in any company by which the fund is constituted, or

(ii)

an entitlement to a share in the investments of the fund.

(4)

In this section “relevant accounting period” means the accounting period referred to in section 490(1).