The Collective Investment Schemes (Tax Transparent Funds, Exchanges, Mergers and Schemes of Reconstruction) Regulations 2013
| Jurisdiction | UK Non-devolved |
| Citation | SI 2013/1400 |
2013 No. 1400
Capital Gains Tax
Corporation Tax
The Collective Investment Schemes (Tax Transparent Funds, Exchanges, Mergers and Schemes of Reconstruction) Regulations 2013
Made 6th June 2013
Laid before the House of Commons 7th June 2013
Coming into force 8th June 2013
The Treasury make the following Regulations in exercise of the powers conferred by section 103C of the Taxation of Chargeable Gains Act 19921.
Citation, commencement and effect
1.—(1) These Regulations may be cited as the Collective Investment Schemes (Tax Transparent Funds, Exchanges, Mergers and Schemes of Reconstruction) Regulations 2013 and come into force on 8th June 2013.
(2) These Regulations have effect in relation to disposals on or after that date.
Amendment of the Taxation of Chargeable Gains Act 1992
2. The Taxation of Chargeable Gains Act 1992 is amended as provided in regulations 3 to 13.
Amendments in relation to tax transparent collective investment schemes
3. In Chapter 3 of Part 3, after section 103C insert—
“Co-ownership schemes
103D.—(1) This section applies in relation to an authorised contractual scheme which is a co-ownership scheme and is not a relevant offshore fund.
(2) Subject to what follows, a participant’s interests in the property subject to the scheme are to be disregarded for the purposes of this Act.
(3) A unit in the scheme is to be treated as an asset for the purposes of this Act.
(4) Section 99B2applies for the purpose of computing the gain accruing on the disposal by a participant of such a unit (but for no other purpose) as if—
(a)
(a) the scheme were a unit trust scheme,
(b)
(b) the unit were a unit in a unit trust scheme (but not an authorised unit trust), and
(c)
(c) the participant were a unit holder.
(5) For the purposes of this Act—
“authorised contractual scheme” has the meaning given by section 237(3) of the Financial Services and Markets Act 20003;
“co-ownership scheme” has the meaning given by section 235A of the Financial Services and Markets Act 20004.
(6) In subsection (1), “relevant offshore fund” has the same meaning as in section 103A.”
4. After section 211A5insert—
“Transfers of assets to certain collective investment schemes
211B.—(1) Subsection (2) applies if—
(a)
(a) an asset of an insurance company is made subject to a collective investment scheme which is—
(i) an authorised contractual scheme which is a co-ownership scheme, or
(ii) a relevant offshore fund,
(b)
(b) that is wholly in exchange for the company being issued with units in the scheme, and
(c)
(c) the condition in subsection (3) is met.
(2) For the purposes of corporation tax on chargeable gains, the company is to be treated—
(a)
(a) as having disposed of the asset mentioned in subsection (1)(a) for a consideration of such amount as would secure that on the disposal neither a gain nor a loss would accrue to the company, and
(b)
(b) as having acquired the units mentioned in subsection (1)(b) for a consideration of the same amount.
(3) The condition is that—
(a)
(a) immediately before the asset mentioned in subsection (1)(a) is made subject to the scheme, the asset was an asset held by the company for the purposes of its long-term business within one of the long-term business categories, and
(b)
(b) immediately after the asset is made subject to the scheme, the units mentioned in subsection (1)(b) are assets held by the company for the purposes of its long-term business within the same category.
(4) For the purposes of subsection (3), a “long-term business category” is—
(a)
(a) if the company is a UK life insurance company, a long-term business category set out in section 116(2) of the Finance Act 20126(subject to section 116(3)), or
(b)
(b) if the company is an overseas life insurance company, a UK long-term business category set out in section 117(2) of that Act (subject to section 117(3)).
(5) In subsection (1), “relevant offshore fund” has the same meaning as in section 103A (application of Act to certain offshore funds)7.
(6) In this section, in relation to a relevant offshore fund, “units” means rights in the fund which are treated as shares under section 103A.”
5. In section 212(1) (annual deemed disposal of holdings of unit trusts etc)8—
(a) in paragraph (b) omit the words “within the meaning of section 355 of TIOPA 2010”,
(b) before paragraph (c) insert—
“(ba)
“(ba) units in an authorised contractual scheme which is a co-ownership scheme, or”.
6. In section 213 (spreading of gains and losses under section 212)9, before subsection (4A) insert—
“4ZB Subject to subsection (5) below, where a company—
(a) acquired units in a collective investment scheme where section 211B(2) applied in relation to that acquisition, and
(b) other than by virtue of section 212, disposes of some or all of those units during the period of three years after the end of the accounting period of the company in which the acquisition took place,
the fraction of any net amount that is treated as accruing at the end of the accounting period of the company in which the disposal occurs is to be adjusted so as to secure that the whole of the chargeable gain or allowable loss attributable to the units disposed of which has been taken into account in determining the net amount has been accounted for; and fractions of the net amount treated as accruing at the end of subsequent accounting periods are to be adjusted accordingly.
4ZC For the purposes of subsection (4ZB) (notwithstanding the provisions of Chapter 1 of Part 4 (shares, securities, options etc))—
(a) units in a collective investment scheme acquired as mentioned in subsection (4ZB)(a) are treated as being disposed of before other units in the scheme or, where there are different classes of unit in the scheme, units of the same class held by the company, and
(b) where units are acquired as mentioned in subsection (4ZB)(a) at different times, units acquired at a later time are treated as disposed of before units acquired at an earlier time or, where there are different classes of unit in the scheme, units of the same class acquired at an earlier time.
4ZD In subsections (4ZB) and (4ZC), in relation to a relevant offshore fund, “units” means rights in the fund which are treated as shares under section 103A (application of Act to certain offshore funds).
4ZE In subsection (4ZD), “relevant offshore fund” has the same meaning as in section 103A.”
7. In section 288 (interpretation)—
(a) in subsection (1), at the appropriate place insert—
““participant”, in relation to a collective investment scheme, has the meaning given by section 103C(10);”,
(b) in subsection (3A)(a)10, after “211,” insert “211B,”, and
(c) in the table in subsection (8), insert the following at the appropriate place—
“Authorised contractual scheme |
s 103D(5)” |
“Co-ownership scheme |
s 103D(5)” |
Amendments in relation to exchanges, mergers and schemes of reconstruction
8. In section 99A (authorised unit trusts: treatment of umbrella schemes)11—
(a) in subsection (1), for “an authorised unit trust” substitute “a relevant collective investment scheme”,
(b) for subsection (2) substitute—
“2 For the purposes of this Act (except subsection (1) and section 103C)—
(a) each of the parts of an umbrella scheme shall itself be regarded as a collective investment scheme of the same form as the umbrella scheme as a whole, and
(b) the umbrella scheme as a whole shall not be regarded as a collective investment scheme of that form or as any other form of collective investment scheme,
and the participants in the umbrella scheme are to be treated accordingly.
2A Subsection (2)—
(a) does not prevent gains or losses accruing to an umbrella scheme which is a unit trust scheme (other than an authorised unit trust) being regarded as gains or losses accruing to the umbrella scheme as a whole, and
(b) does not apply for the purposes of section 100(2).”,
(c) omit subsection (3),
(d) in subsection (4)—
(i) for “subsections (2) or (3)” substitute “subsection (2)”,
(ii) in paragraph (b) for “an authorised unit trust” substitute “a unit trust scheme”,
(e) at the end insert—
“5 For the purposes of subsection (1), “arrangements” includes arrangements provided in a company’s instrument of incorporation.
6 In this section, “relevant collective investment scheme” means a collective investment scheme which is—
(a) an authorised contractual scheme which is a co-ownership scheme,
(b) a unit trust scheme, or
(c) an offshore fund.”, and
(f) accordingly the heading becomes “Treatment of umbrella schemes”.
9. Omit section 102 (collective investment schemes with property divided into separate parts).
10. In section 103A (application of Act to certain offshore funds)12, in subsection (3), for the words from “section 103B” to the end substitute “section 103B, “participant”, in relation to an offshore fund which is not a collective investment scheme, has the meaning given in section 362(1) of TIOPA 201013.”.
11. In Part 3, after Chapter 3...
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