CG73996Y - UK property rich collective investment vehicles: Key definitions and terms: Meaning of 'qualifying investor'

TCGA92/SCH5AAA/para46(3): For the purposes of paragraph 46 ‘qualifying investors’ are as set out at CTA10/S528(4A), and also includes a qualifying fund or company (that is, one that is subject to an election for exemption under paragraph 12). There is an additional requirement in that the following entity types listed in section 528(4A) must themselves either not be close or must meet the GDO condition, see above for details):

  • Authorised unit trust schemes or their overseas equivalents;
  • Open ended investment companies or their overseas equivalents;
  • Limited partnership collective investment schemes (LP CIS);
  • UK REITs or their overseas equivalents.

In the case of a LP CIS, the test for ‘qualifying investor’ applies at the level of the LP CIS itself. Accordingly, the LP CIS will need to meet the GDO test. If the LP CIS fails to meet the GDO test, then an election under paragraph 12(3) may nonetheless still be made provided the company that is the subject of the election is not close on a separate analysis. So, if the LP CIS fails to meet the GDO test, the LP CIS is subject to look through and the test for closeness of the company concerned will depend on the interests of the partners themselves

UK REIT equivalence takes its meaning from CTA10/S528(4A)(j) and does not entirely align with a company that meets the UK property income condition at TCGA92/SCH5AAA/para 1(2) or (2A) (but note such a company is a qualifying investor if it is exempt as a result of an election under paragraph 12).