Taxation of Chargeable Gains Act 1992 Schedule 5AAA paragraph 8

Election for collective investment vehicle to be treated as partnership

Schedule 5AAA paragraph 8 allows the manager of an offshore collective investment vehicle that is UK property rich and income-tax transparent to elect for the vehicle to be treated as a partnership for chargeable gains purposes, with corresponding reporting and compliance consequences.

• The election is available where an offshore collective investment vehicle is UK property rich and transparent for income tax purposes (other than by virtue of being an actual trading partnership)
• Once the election is made, the vehicle is treated as a partnership for chargeable gains purposes from the date of its constitution, affecting the application of the Taxation of Chargeable Gains Act 1992, the Taxes Management Act 1970, and the Corporation Tax Acts
• The election triggers annual partnership return obligations for the vehicle's manager, even in years when no disposals of partnership property have taken place
• On making the election, the normal unit trust scheme and tax transparent fund rules cease to apply to the vehicle, and the election takes effect regardless of whether the vehicle would otherwise be chargeable to capital gains tax or corporation tax