Taxation of Chargeable Gains Act 1992 section Sch 5AAA para 33

Exemption for disposals by companies wholly owned by certain investors

Section Sch 5AAA paragraph 33 provides a capital gains tax exemption for disposals of units or interests in certain collective investment vehicles, where the disposing company is wholly (or almost wholly) owned by specified categories of qualifying investor.

• Where a company that is wholly (or almost wholly) owned by qualifying investors disposes of units in a transparent fund, qualifying fund, UK REIT, or UK property rich PAIF, any gain on the disposal is exempt from capital gains tax.
• The exemption also covers disposals of rights or interests in intermediate companies whose assets consist entirely of units in one of these funds.
• The deemed disposal rules (which can trigger a tax charge when value is derived from UK land) do not apply to qualifying investors who are not insurance companies, or to companies wholly owned by such non-insurer qualifying investors.
• Qualifying investors include qualifying institutional investors, certain life assurance companies (where the interest is matched to non-BLAGAB liabilities), long-term business companies with no BLAGAB, and qualifying funds or companies that have made the relevant exemption election.