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HMRC internal manual

Capital Gains Manual

Substantial Shareholdings Exemption: Qualifying Institutional Investors

F(2)A 2017, TCGA 1992 SCH7AC PARA 30A

For disposals on or after 1 April 2017, Finance (No 2) Act 2017 introduced a further exemption for disposals of shares by companies owned wholly or partly by a new category of institutional investors, defined as Qualifying Institutional Investors (“QIIs”). The new rules apply where at least 25% of the ordinary share capital of the company investing in the shares is held by QIIs. New paragraph 30A TGCA 1992 identifies and defines seven classes of entities currently falling within the definition of Qualifying Institutional Investor.

Para 30A(1) lists the QII entities, which are:-

A             Pension Schemes

B             Life Assurance Businesses

C             Sovereign Wealth Funds

D             Charities

E              Investment Trusts

F              Authorised Investment Funds

G             Exempt Unauthorised Unit Trusts

Para 30A(2) makes provision for this list to be added to, or for the conditions for any particular entity to be treated as a QII to be amended by way of regulation .

Details of the operation of the new exemption are included in the relevant sections of the guidance.