Elect a qualifying company for tax exemption on UK capital gains
Make an election for a qualifying company to be exempt from corporation tax on UK capital gains.
Before making an election, you should review the legislation in Schedule 5AAA to the Taxation of Chargeable Gains Act 1992.
Who can make the election
You must be the fund manager or authorised to act on behalf of the fund manager to make an exemption election for one or more qualifying companies on behalf of a fund.
The fund must be a collective investment vehicle and one of the following:
- a limited partnership collective investment scheme (LP CIS)
- a co-ownership authorised constructed scheme (CoACS)
- another form contractual arrangement
- a unit trust
For unit trusts or other contractual arrangements, the fund must have already made a transparency election to HMRC.
Qualifying conditions
To qualify for election, the company must be UK property rich (broadly, 75% or more of the value of the assets derive from UK land) and either the:
- fund must meet the genuine diversity of ownership condition
- company must meet the UK tax and the non-close conditions
What you’ll need
You’ll need the:
- fund’s name, tax residence or place of establishment, and registered address
- fund’s UK Unique Taxpayer Reference (UTR), if held
- name, address, tax residence or place of establishment, and UTR of each qualifying company covered by the election
- name, address and percentage owned by the qualifying company for each entity covered by the election
If there are more than 5 qualifying companies or entities, you will need to upload these details in a document.
For each fund participant with one or more relevant disposals made on or after 6 April 2019, you’ll need to provide their:
- name
- address
- date of birth, if the fund participant is an individual
- UK UTR, if held
- total relevant disposal value
- total capital gain
- total capital loss
You only need to include relevant disposals made within the last 2 years. Do not include disposals made before 6 April 2019.
If you are providing disposal details for more than 5 fund participants you’ll need to upload these details in a document.
How to make the election
If you already have a Government Gateway user ID and password use this form to make an election.
If you do not have a Government Gateway user ID and password you should use this form to make an election.
After you have made the election
You’ll receive a confirmation email to let you know that HMRC has received your form.
You’ll need to register for the Secure Data Exchange Service (SDES) and send exemption election reports to HMRC.
Last updated 27 October 2020 + show all updates
-
The links in How to make the election have been updated.
-
Slight changes to the summary and guide to make it more clear for making an election and improvements to the user journey .
-
Information about who can make an exemption election on behalf of a fund has been updated.
-
First published.