Taxation of Chargeable Gains Act 1992 Schedule 5AAA paragraph 30

Steps taken by relevant fund manager to wind up relevant fund

Paragraph 30 deals with what happens to an exemption election when a qualifying fund or qualifying company ceases to meet the exemption conditions at a time when the fund manager is in the process of winding up the fund.

• Where an exemption election has been made for a qualifying fund or company, and the entity would normally lose its exempt status because it no longer meets the required conditions, special rules apply if the fund is being wound up
• The fund or company is treated as continuing to meet the exemption conditions for most purposes until the fund is fully wound up, preserving the benefit of the election during the wind-up period
• A deemed disposal is still triggered at the point the exemption conditions cease to be met, which may give rise to a chargeable gain or allowable loss at that time
• Subject to the deemed disposal, the exemption election remains in effect until the winding up of the fund is complete, ensuring that the wind-up process is not disrupted by the loss of exempt status