Taxation of Chargeable Gains Act 1992 Schedule 5AAA paragraph 12

Exemption for qualifying offshore CIV that is UK property rich etc

Paragraph 12 of Schedule 5AAA provides an elective exemption from corporation tax on chargeable gains arising from direct and indirect disposals of UK land, available to certain offshore collective investment vehicles and to companies directly owned by particular types of collective investment schemes.

• An election can be made to exempt a collective investment vehicle (CIV) or a non-CIV company from corporation tax on gains from all direct and indirect disposals of UK land.
• For a CIV, the election requires the vehicle to be offshore, to be a company, to be UK property rich, to meet all qualifying conditions in paragraph 13, and — if it is an alternative investment fund — to also satisfy the CIV definition for another reason.
• For a non-CIV company, the election requires the company to be wholly (or almost wholly) and directly owned by a collective investment scheme constituted as a partnership or a co-ownership authorised contractual scheme (CoACS), with the appropriate entity being UK property rich and the company meeting all qualifying conditions — regardless of where the company is resident.
• Once an election is made, the CIV becomes a "qualifying fund" and the non-CIV company becomes a "qualifying company", and those labels continue to apply even after the election ceases to have effect.