Corporation Tax Act 2009 section 493

The qualifying investments test

Section 493 sets out the qualifying investments test used to determine whether an open-ended investment company (OEIC), unit trust scheme or offshore fund falls within the special tax rules for loan relationships in this chapter.

• A fund meets the qualifying investments test if no more than 60% of its total investments (by market value) are qualifying investments
• For OEICs, "investments" means property subject to the collective investment scheme, excluding cash awaiting investment
• For unit trusts, "investments" means investments subject to the trusts of the scheme; for offshore funds, it means the fund's assets — in both cases excluding cash awaiting investment
• Special rules apply to sub-funds of umbrella companies and umbrella unit trust schemes, where each sub-fund is treated as a separate entity for the purposes of this test