Part 2Reserved Investor Fund (Contractual Schemes): general

Chapter 11Umbrella schemes: modification of this Part

Umbrella schemes: general41.

(1)

This Part applies in relation to umbrella co-ownership schemes and umbrella RIFs with the modifications set out in this Chapter.

(2)

In this Chapter—

“sub-scheme” in relation to an umbrella co-ownership scheme or an umbrella RIF, means the arrangements constituting the scheme or RIF so far as they relate to a separate pool of property, and references to participants in relation to a sub-scheme are references to participants in those arrangements;

“umbrella co-ownership scheme” means a co-ownership scheme—

(a)

which provides arrangements for the separate pooling of the contributions of the participants and the profits and income out of which payments are to be made to them, and

(b)

under which the participants are entitled to exchange rights in one pool for rights in another;

“umbrella RIF” means an umbrella co-ownership scheme which is a RIF.

Umbrella schemes: restriction requirement42.

(1)

An umbrella co-ownership scheme meets the restriction requirement under regulation 10 at any time when each sub-scheme of the scheme meets at least one of the restriction conditions.

(2)

Accordingly, references to a co-ownership scheme in regulations 11 to 14 are to be read as if they were references to a sub-scheme of the umbrella co-ownership scheme.

(3)

Regulation 15 applies as if—

(a)

it provided that an umbrella RIF’s status as a RIF is unaffected by virtue of a change in which of the restriction conditions any of its sub-schemes meets at any time (so long as each sub-scheme continues to meet at least one of those conditions),

(b)

paragraph (3) applied where—

(i)

a RIF’s status as such has at any time depended on one of its sub-schemes meeting the UK property rich condition,

(ii)

the sub-scheme ceases to meet that condition at a particular time, and

(iii)

on ceasing to meet that condition, it meets the non-UK property assets condition, and

(c)

references to a RIF in paragraphs (1), (3) and (4) were references to the sub-scheme.

(4)

Regulation 18 applies as if—

(a)

the reference in paragraph (1) to a RIF breaching the restriction requirement were a reference to an umbrella RIF breaching the restriction requirement as a result of a sub-scheme (the “relevant sub-scheme”) of the RIF ceasing to meet at least one of the restriction conditions,

(b)

the deemed disposal of units under paragraph (4), were a deemed disposal of units in the relevant sub-scheme by the participants in that sub-scheme and the duty imposed on the operator by paragraph (5) to notify the participants of the deemed disposal is to be read accordingly, and

(c)

the reference in paragraph (6) to a breach of the restriction requirement by virtue of a RIF ceasing to meet the exempt investor condition were a reference to a breach of the restriction requirement by an umbrella RIF by virtue of a sub-scheme of the RIF ceasing to meet the exempt investor condition.

Umbrella schemes: becoming a Reserved Investor Fund (Contractual Scheme)43.

(1)

Regulation 4 applies in relation to an umbrella co-ownership scheme as if the requirement in paragraph (1)(d) were a requirement to set out which restriction condition is met by each of the sub-schemes of the umbrella co-ownership scheme.

(2)

Regulation 13 applies in relation to an umbrella co-ownership scheme as if it provided for the scheme to rely on the application of that regulation as modified below to enable a sub-scheme of the scheme to meet the UK property rich condition for the purposes of the scheme becoming a RIF (but see paragraph (4)).

(3)

In such a case—

(a)

regulation 13 applies as if references to “a co-ownership scheme” were references to a sub-scheme of an umbrella co-ownership scheme (except for those references that relate to an entry notice in relation to the scheme), and

(b)

the requirements of paragraph (1) of regulation 13 apply as if references to “the scheme” in sub-paragraphs (a) to (c) were references to “the sub-scheme”.

(4)

An umbrella co-ownership scheme may not rely on regulation 13 in relation to a sub-scheme of the scheme if—

(a)

the scheme has previously been a RIF (including an umbrella RIF),

(b)

the scheme has previously been an authorised contractual scheme, or

(c)

the sub-scheme has participants that have been issued with units in the sub-scheme in return for consideration other than money.

Umbrella schemes: ceasing to be a Reserved Investor Fund (Contractual Scheme)44.

(1)

Regulation 19 does not apply in relation to an umbrella RIF.

(2)

But regulation 19 applies to a sub-scheme of an umbrella RIF where the sub-scheme ceases to meet the UK property rich condition, as if any reference in that regulation to RIF was a reference to sub-scheme of an umbrella RIF.

(3)

Where regulation 19 applies to a sub-scheme of an umbrella RIF, regulation 26 applies as if the first reference to RIF in paragraph (1) and the reference to RIF in paragraph 7(a)(i) were a reference to sub-scheme of an umbrella RIF.

Umbrella schemes: additional notification requirements45.

(1)

The operator of an umbrella RIF must notify HMRC if—

(a)

a sub-scheme of the RIF is wound up, or

(b)

a new sub-scheme of the RIF is established.

(2)

A notice—

(a)

under paragraph (1) must be submitted to HMRC within a period of 30 days, beginning with the day on which the event in paragraph (1) occurred;

(b)

under paragraph (1)(b) must additionally include which of the restriction conditions is met by the new sub-scheme.