Taxation of Chargeable Gains Act 1992 Schedule 5AAA paragraph 46A

References to regulation 75(3) of the Offshore Funds (Tax) Regulations 2009

Section 46A clarifies that a collective investment vehicle's limited capacity to receive investments does not automatically prevent it from meeting the genuine diversity of ownership condition, subject to certain safeguards against pre-arranged allocations.

• A collective investment vehicle can still satisfy the genuine diversity of ownership test even if its capacity to accept investments is limited for any reason.
• However, the vehicle will fail the test if its limited capacity is fixed by its constitutional documents (or otherwise) and a pre-determined number of specific persons or connected groups invest enough to use up all or substantially all of that capacity.
• Where the vehicle forms part of multi-vehicle arrangements, the rules apply by looking at the multi-vehicle arrangements as a whole, not just the individual vehicle.
• The genuine diversity of ownership condition is assessed by reference to regulation 75(3) of the Offshore Funds (Tax) Regulations 2009, including as that regulation applies for the purposes of regulation 75(5) of those Regulations.