Corporation Tax Act 2010 section 528ZA

Listing requirement: ownership by institutional investors

Section 528ZA explains how to determine whether at least 70% of a company's ordinary share capital is owned by institutional investors, for the purposes of satisfying the listing requirement in the REIT rules.

• Ownership of ordinary share capital can be direct, indirect, or a combination of both, and the rules for tracing indirect ownership apply through various types of entity including unit trusts, collective investment vehicles, and co-ownership schemes.
• Where shares are held under repurchase agreements or stock lending arrangements, the original holder is still treated as owning them for the purposes of this test.
• If a partnership holds ordinary share capital in a company, each partner is treated as owning a proportion equal to their interest in that share capital — but this look-through does not apply to a limited partnership that itself qualifies as an institutional investor under the collective investment scheme rules.
• Where ownership is traced through entities such as exempt unauthorised unit trusts or authorised contractual co-ownership schemes, references to ordinary share capital are read as references to units or equivalent interests in those entities.