Taxation of Chargeable Gains Act 1992 Schedule 5AAA paragraph 1

Meaning of "collective investment vehicle", "participant" and "unit"

Section 1 of Schedule 5AAA defines the key terms "collective investment vehicle", "participant" and "unit" that underpin the rules on UK property-rich collective investment vehicles.

• A collective investment vehicle (CIV) covers collective investment schemes, alternative investment funds (AIFs), UK REITs, and certain non-UK resident companies that meet the property income condition — broadly requiring at least half their income to come from long-term property investments, substantially all such profits to be distributed annually, and no local tax liability on those property profits.
• Non-UK resident companies qualifying as CIVs must generally not be close companies, or be close only because a qualifying investor is a participator, and the rules distinguish between standalone companies, principal companies of groups, and subsidiary group members with slightly different conditions for each.
• A "participant" is either a person who takes part in the arrangements of a collective investment scheme or AIF (for example by owning part of the property held by the scheme), or a shareholder in a qualifying company; a "unit" is the corresponding rights or interests in the scheme or AIF, or a share in the qualifying company.
• "Long-term property investments" means direct or indirect investments held on a long-term basis in land or in estates, interests or rights in or over land, and "profits" for the property income condition excludes profits of a capital nature.

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