Corporation Tax Act 2010 section 528ZB

Genuine diversity of ownership condition

Section 528ZB sets out what it means for a collective investment scheme to meet the "genuine diversity of ownership" condition, which is relevant to whether a person holding shares on behalf of such a scheme can be treated as an institutional investor.

• A collective investment scheme meets the genuine diversity of ownership condition if it satisfies specified requirements from regulation 75 of the Offshore Funds (Tax) Regulations 2009, even if the scheme is not itself an offshore fund
• Where a scheme forms part of multi-vehicle arrangements (i.e. two or more linked schemes that an investor would view as a single investment), the conditions can be assessed across the arrangements as a whole
• A scheme is not prevented from meeting the condition merely because its capacity to receive investments is limited, unless that capacity is fixed in the scheme documents and a pre-determined number of specific persons or connected groups exhaust all or substantially all of it
• For schemes established before 1 April 2022, the diversity of ownership requirements are treated as met if the scheme manager provides a statement to HMRC covering the intended investor categories, wide availability of interests, and confirmation of proper marketing

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